The State of the B2B CMO
Business-to-business chief marketing officers have dealt with a lot over the last few years: consequential technology shifts, an increasingly customer-led journey, the rise of product-led growth, a massive and fragmented marketing technology landscape, and a global pandemic, prompting many to upend their marketing plans completely.
This survey captures practices, performance, and plans of B2B CMOs. Our goal wasn’t just to benchmark budgets, teams, investments, and software spending priorities, but also measure survey-takers’ practices with an eye toward pinpointing which lead to attractive outcomes for them and their sales teams.
We surveyed 169 B2B marketing leaders from September 23, 2021 to November 9, 2021. This isn't a statistically significant number, but it does offer some directional guidance. See survey methodology for respondent details. Here’s a summary of what we learned:
- The most commonly-staffed roles are product, revenue, and corporate marketing
- When BDRs report to marketing, sales hits its targets more often
- Content marketing is a difference-maker in meeting marketing targets
- Investing in conversational intelligence is linked to better sales outcomes
- Pipeline is the most common performance metric, followed by closed business
- Leaders whose primary metric is pipeline or closed business meet targets more often than those whose primary is leads
- Practices like maintaining core messaging, sharing a revenue model with sales, and speaking with customers are linked to hitting sales and marketing targets
- For their next career move, most CMOs have their sights set on…the CMO role
The marketing team
How big should the marketing team be at each stage, and what roles should be staffed first?
Most respondents in companies of less than $10 million in ARR have teams of five or fewer; most of $10–50 million have 6–10; most of $50–250 million have 21–50; and most above $250 million have 50 or more.
The most commonly-staffed marketing role at every company ARR stage is product marketing, followed by revenue marketing, and then corporate marketing.
Should BDRs report to marketing?
An age-old question is whether the business development representative (BDR) function should report to marketing. Only a quarter of respondents own the function, but it pays off when they do. When BDRs report to marketing, 67% and 76% of respondents report hitting sales and marketing targets “most or all of the time,” respectively, versus 57% and 64% when they don’t.
The role that seems to make a big difference in hitting sales and marketing targets is content marketing. 83% of respondents have at least one content marketer on their team. Of those who do, 62% and 71% of respondents report hitting sales and marketing targets “most or all of the time,” respectively, versus 46% for both of those who don’t.
The marketing budget
What should the marketing budget be at each stage, and how should it be spent?
Respondents in companies of less than $10 million in ARR budget an average of $2 million annually; those of $10–50 million budget $2 million; those of $50–250 million budget $7 million; those of $250–500 million budget $14 million; and those above $500 budget $6 million.
How do marketing leaders put those dollars to work? We asked respondents to break down their demand generation budgets by the percent they spend on each category (to normalize the numbers, we asked them to respond as if we weren’t in a pandemic).
As expected, these percentages vary by stage. At every stage except $250–500 million of ARR, events make up the largest portion of the budget (search engine marketing is the highest at that stage). The second largest portion is SEM, except above $500 million of ARR, in which case it’s content syndication.
Regarding marketing software (the “martech stack”), how do leaders allocate budget? We asked respondents to break down their software spend by the percent allocated to each category. The top three investments are CRM/email (23%), website (17%), and ABM (10%).
We looked at sales and marketing success through the lens of software investments, and found conversational intelligence to be a difference-maker. Only a little over one-third (35%) of respondents invest in the software, but those who do report a 15- and 22-point differential in meeting sales and marketing targets most or all of the time, respectively, versus those who don’t.
What types of content do marketing leaders invest in, and do they make a difference? On average, 21% of the content that respondents produce is video. eBooks (17%) and white papers (16%) are next on the list.
Some of the more innovative content types like interactive tools and infographics count for only an average of 9% and 8%, respectively, of total content. That said, producing them at all is meaningful. 72% of respondents who invest in interactive tools and infographics at any percentage meet their sales and marketing targets, versus 59% and 58% who don’t.
We asked respondents about their practices, including whether they maintain a core messaging document; share a revenue model with their sales counterpart; interact frequently with customers; use their own product often; and are active in board meetings.
Maintain a core messaging document
How important is messaging consistency, and are marketing leaders on the same page with their senior leadership about this? 39% of respondents say their senior leadership doesn’t focus on message consistency, yet more than three-quarters of the leaders themselves (77%) maintain a core messaging document. That number jumps to 87% for respondents whose senior leadership places at least some focus on it. Does message consistency matter? 70% of respondents who maintain a core messaging document meet their marketing targets, versus only 56% who don’t, a 14 percentage-point differential.
Share a model with sales
How about having a common understanding of financial goals between sales and marketing? 83% of respondents share a spreadsheet or model with their sales counterpart that includes revenue goals, stage definitions, and conversion assumptions. Does it make a difference? 65% of respondents who do meet their sales targets, versus 34% for those who don’t, a 31-point differential.
Interact with customers
Customer intimacy and empathy are critical to marketing success. But that can be hard to measure. We simply asked respondents how often they speak with customers, and looked at their responses against their success metrics. Given the conventional wisdom that more interaction is better, we were surprised to see that only 37% speak with customers weekly or more, and a full 30% only do so quarterly or less.
How does customer interaction frequency relate to sales and marketing success? In short, marketing leaders who speak with customers frequently meet their targets more often. 65% and 71% of respondents who speak with customers weekly or more meet their sales and marketing targets, respectively, versus 54% and 62% for those who do so quarterly or less.
Explore the product
We were curious about the impact of marketing leaders being familiar with their own products. Only one-third (33%) of respondents use or explore their product weekly or more, whereas 39% do so quarterly or less. And more than one-fifth (21%) never do. Never!
Similar to talking to customers, product familiarity is linked to sales and marketing success. 69% and 75% of respondents who use or explore their product weekly or more meet their sales and marketing targets, respectively, versus 57% and 63% for those who do so quarterly or less.
The hands-on factor
We created a special category — the “hands-on factor” — by multiplying two highly-correlated categories: marketing leaders who explore their product and speak with customers frequently. Because one possible reason some CMOs might be hands-on is that they are short-staffed, we tested whether hands-on CMO staffing is different. However, the data show that staffing levels don’t impact whether a CMO is hands-on. For CMOs who are hands-on, it is a matter of personal style, not necessity. We did find a strong, positive correlation between the “hands-on factor” and positive practices such as maintaining a core messaging document, and sharing a common model with revenue counterparts. And, hands-on CMOs also tend to have better relationships with their boards.
However, the numbers here suggest that being a hands-on CMO, as we have measured it, is not strongly associated with making your numbers. While hands-on CMOs trended slightly higher for both marketing and sales hitting their targets, neither difference was statistically significant. Being more hands-on will probably be beneficial to CMOs and certainly won’t hurt, but is not enough by itself to ensure success.
Note: While the trend is that hands-on marketing leaders and their sales counterparts hit their targets more often, the difference isn’t statistically significant.
Participate in board meetings
How important is being an active participant in board meetings? We asked respondents how active they are at board meetings. 59% are active or very active, while 41% aren’t. 12% don’t participate in board meetings at all.
Similar to customer intimacy and product familiarity, active participation in board meetings is associated with successful outcomes. 66% and 75% of respondents who are “active” or “very active” participants meet their sales and marketing targets, respectively, versus 51% and 56% for those who aren’t.
Leads are so yesteryear! It’s not just a hopeful rallying cry; more than three-quarters (76%) of marketing leaders say pipeline or closed business are their key measurements. Leads brought up the rear at only 16%. Since we asked for both a primary and secondary metric, pipeline was the most called-out primary choice, with 51% of respondents. Those who identified “other” mostly wrote in a variation of pipeline or described a stage more qualified than lead (e.g., sales-qualified lead).
Does it matter, though? Respondents for whom leads are the primary performance metric, only 40% and 60% meet their sales and marketing targets, respectively, but those numbers jump to 62% and 66% for respondents for whom it’s pipeline or closed business. One of the takeaways from the chart below is that there’s not that much difference in marketing making its goals whether they focus on leads or pipeline. Of course — that’s because they’re measuring to their goals! The big difference is in sales because that’s where the rubber hits the road, when marketing is working toward one goal and sales toward another — the primary cause of all dysfunction!
What big, high growth CMOs measure
Companies can be either large or small, or fast-growing or more stagnant. Companies that are large and growing fast are less common, but understanding how they operate could help us all understand what works and what doesn’t. To assess this, we create a variable by multiplying a company’s size as measured in ARR by their growth — the ARR x growth index. What’s clear is that companies that are both big and growing fast cite pipeline and closed won as primary performance metrics. Companies that cite leads as their top metric lag in this measurement substantially.
How does the ARR x growth index relate to BDR reporting? Ensuring that marketing’s investment in driving demand is optimized is critical as companies grow, but having the necessary attention from sales in fast-growing environments can be a challenge. The evidence suggests that CMOs of big and fast-growing companies also tend to take matters into their own hands to optimize return on the investment in generating demand.
Marketing leaders’ career trajectory
What will marketing leaders do next? When asked what roles they would like to pursue in their next career, respondents chose CMO of a similarly-sized company (56%), CMO of a larger or higher-profile company (48%), and a non-operating role like investor or advisor (42%). The numbers add up to more than 100% because we instructed them to select all that apply. We also had some fun write-in answers, like “pastry chef” and “beach bum.” Sounds like a plan to us!
This survey is the result of a joint project by Jamie Barnett, Latane Conant with 6sense, Kerry Cunningham with 6sense, and Matt Heinz with Heinz Marketing. We conducted it between September 23 and November 9, 2021 and had 169 responses that we solicited from our personal networks, LinkedIn, a (non product-oriented) CMO community sponsored by ABM software maker 6sense, and a smattering of other sources. Our purpose was to benchmark marketing trends and understand practices and their impact.
Here’s a breakdown of respondents by role and ARR stage.
Download the report.