Current Experiences and Preparing Your Business for What’s Next
Part 1 of a 4-Part blog series from TechTarget CEO Mike Cotoia
With the rise of digital commerce, one of the really interesting developments we’ve all become attuned to is how our experience as consumers is impacting our expectations of vendors in our B2B lives. It shouldn’t be too much of a leap then to realize the connection between the turbulence we’re all experiencing as consumers – supply chain problems in popular commodities, continued inflation, rising interest rates – and the challenges we should be prepared for in our companies.
As the pandemic started to abate, people began returning to restaurants, sporting events and the like with real exuberance. Now, because of macro changes that are affecting the business cycle, many households are looking more closely at discretionary expenses. We’re starting to evaluate near-term nice-to-haves that impact monthly expenses against longer-term goals like saving for a house, helping with college tuition payments, and saving for retirement.
The point is, while essential strategic goals haven’t been shelved, tactical priorities have started to shift.
Just as our consumer tactics are changing, so must corporate preparation
If you’re in B2C, you’ve experienced significant changes in consumer behavior from just six months ago. The ripple effect of this on advertising agency billings has been visible for a while. If you’re in B2B, you’re seeing changes in the macro environment. While you may have yet to directly experience changes in deal velocity, pipeline forecasting accuracy, CAC ratio pressure and the like, for those who have been through changes in the business cycle before, there is ample evidence that plans for adjustment should be at the ready.
The slowing of the global economy we’re experiencing today is projected to worsen in 2023. Many economists and financial experts are now projecting a global recession in 2023. Organizations will need to become more efficient. They’ll need to maximize productivity from tighter resources and critical investment decisions. To be in the best competitive position possible as things tighten up, and to be able to accelerate out the other end, companies need to focus intently both internally on their operations and externally on their customers and prospects. At the same time, it’s again important to note here that like some of our most important learning gained during the pandemic, what we think in our guts about customer demand may be very different from what actually happens in the market. Just two years ago, many tech marketers thought that tech spending in air travel and hospitality would dry up completely. Yet our data showed, and history bore this out, that significant infrastructure improvements were in fact executed in those industries. At this very moment, our data is again showing that spending for key enterprise technologies continues especially among the best companies.
Tech vendors must understand both sides and adjust wisely
The SaaS and Cloud revolutions have delivered amazing benefits to companies. As end users – consuming professionals – we’ve all experienced significant benefits in how we’re able to do our jobs. When dealing with a clumsy process, many of us now reflexively wonder “is there an app for that?” At the same time, there remain important distinctions between critical infrastructure and tactical nice-to-haves. So operators need to evaluate their technology portfolios along these lines. And vendors need to understand their customers’ realities and position accordingly. As Bain and others have pointed out, there is much you can do now to gain competitive advantage. I want to share some perspective on what we at TechTarget have learned (and you should consider) from helping our clients accelerate through the three down-cycles we’ve grown out of together. I’ll introduce this at a high-level now and then drill in deeper in subsequent blogs.
- “Keep your friends close and your enemies closer” (age-old proverb) When things tighten up and fewer prospects are actually entering a buying mode, it makes every existing customer that much more important. Now is the time to really get inside the heads of your customers, yes by listening to them closely, but also proactively through modern data-driven analytical approaches. When you can understand interests and needs at the person level, you can better determine what you have that you should double down have. Likewise, you can learn what your competitors think is important and much more precisely defend your position against that.
- “Understand Core vs. Context” (tip of the hat to Geoffrey Moore) Extending this concept from the core operations of your company out to the GTM teams on the front lines can be super helpful. You need to make sure your sellers have exactly what they need. To out-perform peer organizations, to be proactive and pre-emptive, they need the very best insights you can get to them. Likewise, by focusing your stack and tactical optimization efforts on the most direct connections to value, you can inject both more business agility and more reliable returns into your marketing investments. You can target real demand more effectively and eliminate waste. You can sunset under-leveraged systems and rebalance your sourcing approaches ─ consolidating towards suppliers in a good position to help you weather a downturn.
- “The Digital Reinvention of Tech GTM” McKinsey’s research suggests that the pandemic accelerated digital transformation by the equivalent of seven normal years. There’s no doubt that today’s buyers are both far more self-service oriented and comfortable with digital business interactions than ever. To understand your buyers better, you will need to be sure to meet them wherever they choose. You’ll want to build more useful content and be in the channels, locations and formats they prefer. As the last few years have dramatically illustrated, when your funnel looks dark, you need to look to where the audiences you want are actually congregating – there’s plenty of light on the web that your marketing should be heading directly for.
In this first piece in a series, I’ve tried to lay out the situation that I see developing and to topline three areas where I believe any operator should be preparing energetically. In coming editions, to help with that, I’ll drill into each in much more detail. If you’d like to discuss this or other relevant topics, please feel free to reach out to me here.