As part of my consulting work, I try to help sales, marketing, and service leaders zoom out to think about where the world is going and how they should react to it. Usually this is a process of me identifying trends and us talking about how they impact the client's revenue operations.
Here is a sampling of the 7 trends I’m helping my clients focus on for 2023:
- Your recession strategy matters more than whether the economy is in recession
- It’s time to get smart about software costs (businesses are getting more out of their apps, rather than adding more apps)
- Generative AI will be a “hammer” for every kind of content
- Marketers are going to have to focus on what actually works
- Sales leaders need to focus on the right metrics
- Buyers adjust their thinking quickly
- HubSpot stuff I’m excited about: CRM Customization + Enterprise-Grade Reporting
Your recession strategy matters more than whether the economy is in recession
You’ll get as many opinions about where the economy is heading as people you ask, whether they are economists, salespeople, or c-suite execs. But if you look at the companies that fare well during and after a recession, what matters is less their industry or risk of recession exposure, and what matters more is their strategy.
According to the smart folks at Bain, the winners during and after a recession first focus on becoming more profitable and then on investing for sustainable growth.
Here’s their analysis, based on EBIT in the '08-'09 recession and thereafter:
That recession’s winners became more profitable both during it and after. Their commentary is helpful:
Looking ahead, new digital tools and channels will offer more cost-effective and customer-focused opportunities to capitalize on the next recession and pursue growth. One example: the shift in marketing mix from traditional media toward digital channels enabling more personalized customer outreach with high-velocity testing of messages and offers. Next-generation data analytics provides a larger arsenal this time around to set pricing at different levels and move quickly to adapt, based on how different customer segments value a company’s products or services.”
Using a pullback to get smart about where you’re making money today will only help you make more money tomorrow:
Source: Bain & Co, “Beyond the Downturn: Recession Strategies to Take the Lead”
Questions to ask:
- For sales leaders, do we know which are our more profitable customers or products?
- For marketing leaders, which marketing channels are the most and quickest ROI-positive?
- For service leaders, are there ways to become more efficient in our touch and touchless service interactions?
It’s time to get smart about software costs
Digital should be a faster/cheaper way to do analog jobs, but the theory isn't enough in times of cutting. When times are more flush and growth is a little easier, almost anyone with a company credit card can add to the software stack. This is fine until it’s time to integrate all of the data or rationalize all of the costs. Point solutions may be "best in class", but price to value favors multi-tool apps that easily integrate.
What stood out to me from Vendr’s view of SaaS purchase choices at the end of 2022 is that multi-tool, integrated apps along with the apps closest to generating real business value are getting renewed:
Businesses are getting more out of their apps, rather than adding more apps
We’ve seen huge growth in the number of SaaS apps a business has, from an average of ten to over a hundred in less than a decade. Some of this was probably from less software being available outside of the SaaS model, but I’d attribute more of the impact to everyone buying them for every department separately. It’s easier to buy than to cancel, especially if the buying decision is a long time ago.
The growth in application numbers is starting to tail off:
I’d rationalize this as: people are getting more done with existing applications. And rightly so: SaaS companies plow a ton of money into their products, and the things you can do with existing apps almost always outnumber the things you are doing.
Along these lines, the biggest time-saver I’ve seen recently is organizations that intelligently integrate their CRM with their project management tools. This allows markers, sellers, and service people to more closely connect the value-generation activities with the background tasks that make them possible.
Questions to ask:
- For sales leaders, what back office tasks are my reps doing? How can we automate these?
- For marketers, where can we streamline the whole workflow, rather than just a piece of it?
- For service people, how can our 1:1 conversations lead to content for the rest of the go-to-market org?
Need to get more done? It’s time to integrate CRM + Marketing with Project Management Tools.
Generative AI will be a “hammer” for every kind of content
This trend fits in with app consolidation, but with the headlines raging, I need to call it out separately. Everyone in an organization is wondering how AI can make their typing jobs easier. The sales rep is thinking about whether their 1:1 emails can be done with one button. The marketer is dreaming about endless blog “content,” produced with just a few taps. And a designer might be wondering about original art without any pain. All of these wishes are ok: doing more with less can seem like a fine idea.
But they’re all wrong: relying on AI for your go-to-market is leaving too much up to chance.
Fifteen years ago, to stand out in the marketplace, you could literally put anything online. Google would index you, Facebook would feature you, and you’d be off to the races. Because something was better than most of your competitors, posting more was better, too. But those days have long-passed. Online content is a really crowded marketplace. To stand out, your images and copy have to be truly excellent and truly human. These content competitions won't be won with volume, they'll be won with quality.
If your team is really strong at editing, then maybe generative AI could produce rough drafts. Tools like OpenAI, Jasper, Cohere, Writer, Notion, or copy.ai could be worth considering. The kinds of tasks that these text generation models are best for include:
- Generating rough drafts as a starting point for a post or email
- Making small changes to tone and voice of existing text
- Creating shortened or summary text based on some input
Most of the value in content work isn’t related to the items above. It comes from thinking uniquely about your audience, how you can engage them, and help them. The bots aren’t quite ready for that human labor just yet.
Questions to ask:
- For sales leaders, how can we give extra value to human moments, rather than take the easy way out?
- For marketers, what’s the one kind of message our audience relies on us for, and how can we maximize its moment?
- For service people, when are our people the best possible interaction point, and how can we route customers to them then?
Marketers are going to have to focus on what actually works
Digital marketers can be a trend-seeking bunch. You can be sure that NFTs, Crypto, and the Metaverse were in many of their trend decks all 2022-long, or at least until the last few months. With Crypto imploding and the Metaverse not quite launching, the trend marketers should focus on for 2023 is how to reliably contribute to their company’s objectives.
HubSpot has this look from a survey of marketers heading into Q4 of 2022, and what they plan to focus on next year:
- Influencer Marketing: 89% of marketers plan to spend more money on influencer marketing next year
- Video marketing, especially short-form, is the preferred marketing channel for all things
- ⅓ of Marketers are taking metaverse and web3 out of their plans (they are not into Crypto)
- More marketers are planning to join YouTube than any other platform
- Search is the top place for product/service research, but social is the second by a mile and it’s growing: people shop on social
That kind of focus is sharp: be where people make buying choices, publish good work to where they spend their time, and ensure your spends are going to uphold your brand.
A few more marketing trends to react to:
- Video: publish in short form for engagement and on YouTube for SEO.
- Email: Litmus says $1 spent returns $36. New rates to focus on: conversion and reply.
- Content: think like a publisher. Meaning: quality > frequency, rented -> owned audience, build first monetize later.
A final word on email: spam-like practices are getting harder. Treating your email subscribers like a business piñata, which you can hit for money whenever you’d like, is sure to result in diminishing returns. Businesses with giant email audiences and “blast” tactics are finding themselves with decreasing deliverability, increasing spamtrap events, and less revenue from email. It’s time to end the “more is better” rule of thumb. We know what makes email better: sophisticated segmentation, creative messages, and optimizing for the conversion or reply.
In 2023, for email marketing, better is better.
Questions to ask:
- For sales leaders, are we pushing marketing to send emails to people who aren’t engaged?
- For marketing leaders, how concrete are your segmentation tactics, messaging plays, and email marketing goals?
- For service leaders, can you help execute a marketing email reply strategy for revenue or CSAT?
Sales leaders need to focus on the right metrics
In times of recession, it’s only natural for sales to become an excuse center: it’s harder to sell when times are tough! These may be the right times for quota relief or more aggressive discounting or executive support for larger deals. But those kinds of extraordinary measures shouldn’t become the goal. Focusing on the right metrics can help sales teams weather the storm and position their companies for profitable growth in the future.
Here are the metrics I’m advising my customers to focus on:
- Average Profit Margin
- YoY Growth
- Conversion Rate
- Productivity Metrics
- Quota Attainment
- Win Rate
- Customer Acquisition Cost (CAC)
Some considerations for the above from HubSpot’s Sales Blog.
Questions to ask:
- For sales leaders, are the metrics we need to focus on reliable and in front of everyone on the team regularly?
- For marketing leaders, how are we keeping things like CAC, conversion, and revenue in front of marketers?
- For service leaders, are there ways to improve upsell motions or margins with service efforts?
Buyers adjust their thinking quickly
People sometimes say that those in the mortgage or construction industries are the first to know if there’s a recession and the first to know when we’re out of one. I’d argue that buyers are the first to know: whether based on their personal or professional budgets, they know what’s around the corner and they are constantly making adjustments.
Keeping your ear to what your buyers are saying is vital to pivoting to what tactics may work.
As an example, here’s how buyers replied to a HubSpot survey about the impacts of inflation:
More than quick adjustments, I’m seeing buying trends converge: the way people buy for themselves and for their businesses isn’t all that different. People search for things online, they look for social media references (or in-person references), and so on. One of the more fascinating post-pandemic B2B buying trends is that people no longer expect to meet sales in-person, or even at all: touchless purchase, even for big ticket and big contract items, is more a norm than ever.
Here a sample data highlight of that trend (How to purchase):
One more tidbit from the B2C side of things, HubSpot found that influencer recommendations matter more than recommendations from friends and family! The divide between B2B and B2C marketing may be smaller than ever.
Questions to ask:
For sales leaders, how have our customers’ buying habits changed? Have we adjusted sales tactics?
For marketing leaders, where do our content and audience tactics need to adapt to new buyer patterns?
- For service leaders, how might our touchpoints drive additional sales?
HubSpot stuff I’m excited about
This isn’t really a 2023 trend, but it is where I’m seeing HubSpot evolve. If you’re a HubSpot user, these are the areas of the software you should focus on adapting for your business: by doing so, you’ll benefit from HubSpot’s 100s of millions of investment in our software.
HubSpot took CRM customization to the big leagues
Launched over 2021-2, with a capstone at INBOUND22, HubSpot’s foray into CRM customization is now complete. We have a giant stack of developer tools that your CRM admins can use to put robust data and deeply powerful functionality into the screens your marketers, sellers, and service people use every day.
HubSpot is doubling-down on Enterprise-Grade Reporting
Our multi-touch revenue attribution reports have existed for a while; the new kid on the block is customer journey reporting. Put together, we now have the ability to not only measure everything in terms of revenue, but also see where friction in the process could be losing revenue.
Multi-touch revenue attribution reporting automatically connects every customer interaction to revenue, so you can make strategic decisions rooted in business value. This tool gives closed-won revenue credit to all interactions someone had with a brand before becoming a customer.
Customer journey reporting gives you insights into any part of the customer journey, revealing insights you might otherwise miss. This lets marketers identify gaps and determine how effectively marketing actions or assets pulled contacts through the customer journey.
Here’s an example (using sample data) of both types of reporting:
Leads receive an email following the conference with a CTA link to a landing page.
Eager to learn more about the solution, the lead watches a short demo video and registers for an upcoming webinar.
Following an engaging webinar, the lead fills out a form to meet with a sales representative.
Multi-touch revenue attribution report
According to the multi-touch revenue attribution report, the webinar generated $4,277.78, notably some other assets performed better than the webinar.
Customer journey report
The customer journey analytics report suggests that webinars are proving to be effective in driving interest, but aren't driving qualification. In this case, webinars are effective, but potentially more of a TOFU tactic and nurturing flows need to be added after webinar registration and attendance.
Questions to ask:
- For sales leaders, do we have other tools or screens we can put into our HubSpot CRM?
- For marketing leaders, are we making data-driven decisions about how we actually influence revenue?
- For service leaders, are our reps cognizant of all a customer sees before talking with us?
If these kinds of conversations are the sort you need to have, then I'd be happy to help you get started. Please book a free moment on my calendar here.