What you need to know:

• Salesforce’s Leandro Perez reckons the cracks are starting to show in the creaking global workforce and Australia could be in a lag, citing layoffs from Apple and Oracle last week as the latest signals to watch; employees "have had it pretty good for a long time...and I'm seeing a lot of complacency," he says.
• Speaking at the Mi3-LinkedIn B2B Next summit, Perez joined Commonwealth Bank of Australia CMO Jo Boundy, four months into the role after leaving the top marketing gig at Qantas, and ServiceNow’s Head of Marketing Caroline Raj, to unpack the Ehrenberg-Bass 95:5 rule, brand versus demand generation in a downturn and the shifting dynamics between B2B marketing and sales teams. The latter, says Raj, are facing a collapse in their access to decision makers as the B2B purchase journey becomes more complex and more people are involved in making B2B purchasing decisions. A downloaded whitepaper, for instance, no longer guarantees a hot lead.         
• Enticing B2C marketers to B2B roles is a huge opportunity but seriously hard, Raj says. B2B marketers have the data and analytics skills that most B2C marketers are now trying to build for their future careers but there were out-dated perceptions to fix. Raj called for a coalition of B2B businesses to collaborate on attracting B2C talent to the B2B sector.
• Commbank's Boundy says she agrees with "the principle" of the 95:5 rule - that only 5% of customers for a business are in-market to buy at a given moment, the other 95% should be in the priming phase to build a brand's mental availability for when they do purchase - but she's not sure the "percentage ratio of 95:5 is universal". Perez and Raj concur.  
• In contrast to Perez' assessment of what is happening in global markets for talent and contracting business conditions, Boundy pointed to a large gap in tumbling consumer confidence versus more robust sentiment among large and small businesses.  
• All three CMOs said despite economic volatility, they were holding their budgets and allocations between brand investment and short-term demand generation activities. 

Talent crunch crunched?

There’s a global “shortening” at major companies that may signal the end of the talent pendulum swing in favour of employees, Salesforce APAC marketing lead Leandro Perez says. In the past couple of weeks, Oracle has laid off hundreds of people from its advertising and customer experience group and Apple confirmed it had cut 100 recruitment contractors citing “realities of the environment”.

Speaking on the CMO Couch session at the Mi3-LinkedIn B2B Next summit last week, Perez said current tight conditions that favour talent and amped-up job perks and expectations are unlikely to continue for long.

“We've had it pretty good as employees for a long time and I'm seeing a lot of complacency where people think that it's on the employer to come down to every whim,” he said.

“I think it's really important – I like to add value to the business. And I think it's really important that people understand that maybe one day the swing potential is your way, but the other day may not be. And I'm looking at the US, there's a lot of companies right now – touch wood not us – but many companies are, sort of, shortening…So I think it's important to always be sharp and be looking at what you can offer to a business.”

Perez says he was a computer scientist early in his career, not a marketer. “We can take people from all walks of life as long as they have the right attitude and skills.”

Talent was a key talking point at the B2B Next event, which toiled deep into the B2B marketing industry – B2B companies like ServiceNow are, globally, bigger than Ford and Ferrari combined but remain under the radar for many. The CMO Couch spoke about talent, how marketers should approach global economic unease, budget conversations and the brand-performance media mix.

The latest industry figures show 41 per cent annual industry churn in agencies in Australia, while IAB Australia CEO Gai Le Roy said the demand for digital talent was the “highest that I have seen in my 20 plus years in the industry”, with 9.8 per cent vacancy rates. ServiceNow’s ANZ Head of Marketing, Caroline Raj, said she deliberately tried to bridge the B2B-B2C marketer gap with a recent vacancy – but found there’s still a big challenge in B2C marketer expectations and skills.

“We've got lots to learn from our B2C colleagues. However, I did kind of go out to the market and I was thinking, 'hey, let's go and try and get a diverse set of skills in the team and try and broaden out [with B2C expertise]',” Raj said.

“I didn't have as much luck as I would hope. So I think there's still some restrictions on people's understanding and capabilities around how the lead process works and how to apply analytics, which I think are the future of marketing. I did go with a B2B marketer in just the last interview round, just recently. I think this is probably a call out for the community and associations in our industry. I think there's a gap here. I think we need to ask for extra help and education in the industry about how we can bridge the gap between B2B and B2C. What I'd like to see is everybody be marketers. We all have those great skill sets around brand and storytelling and analytics...we'll all have pros and cons and strengths and weaknesses – but we do need to bridge this.”

Commonwealth Bank of Australia CMO, Jo Boundy, who joined four months ago after 12 years at Qantas, said pigeonholing marketers as B2B or B2C is what needs to change.

Economic conditions

Beyond talent trends, Boundy said there was an unusual phenomenon going on in the economy at present where consumer confidence is falling and on par now with the Global Financial Crisis, inflation is rising – yet business confidence is very high and ‘capacity utilisation’, which measures how busy businesses are, is at a 25-year peak.

“So there's this really unusual dynamic going on and I think that's something that some businesses are really trying to grapple with. The reality is that most businesses have actually passed on the increased costs to their consumers, which is probably why we're seeing this difference. But that's not going to be sustainable,” Boundy said.

“We talk about the next twelve months of businesses, like everything's coming at them. We've got the macroeconomic environment, we've got the Pandemic and Covid, which is still impacting a lot of businesses… You've got geopolitical challenges, the cost of the challenges with supply chain, the cost of getting goods into the country, you've got rapid pace of technological change - like, Jeez, being a business at the moment is pretty confronting and challenging. There's a lot going on and I think it's great that the confidence index is high. I just hope it stays there.” One of Boundy's biggest challenges is figuring out how to market to small businesses and consumers when the divergence in sentiment is so high.

Raj and Perez, meanwhile, said they’re seeing more layers of approval for business spend as confidence crimps.

“I think we are a little bit behind still what's happening already in the US and in Europe. Hearing from them, I think we still haven't really felt the full impact of what is to come,” Perez said. It’s not all doom and gloom, he added, but: “There's now deals that previously would have just been secured by the head of a function that now might even need to go to a board. And if you're a seller, not that we've got many sellers here, but you need to think about that and then that's different materials, different presentations you need to have, and they take a long time. Board meetings aren't every other week. So for us it means in marketing that we need to be constantly keeping folks warm. That's our job. More than just planting the seed and creating opportunity, is how do we continually engage?”

Raj said she was “seeing more approvers for deals” now, as well as more focus on travel and expenses budgets.

Tactical shift

With a worsening economic outlook, potential ‘shortening’ among the global giants, and an ongoing talent crunch – what happens? Is it time for marketers to double down and focus on achievable wins, shorter-term goals and demand generation? No, Perez says – though he concedes software-as-a-service brands like Salesforce can be more shielded from the immediate impacts.

“Most of our revenue is still yet to come, that's already been committed… If, actually, our sellers sold nothing for the next twelve months, we would actually still be an extremely profitable company. But of course no one wants to do that. Everyone wants to be a growth company,” he said.

“Of course, you want to look for the now and you want to grow, but we don't have to be so knee jerk in terms of reacting to do a complete pivot. And so we are taking a balanced approach at the moment, and we are not pulling out of anything that we're doing … there's no reason for any rash decisions from our point of view.”

Only five per cent of customers are in market at any one time for B2B companies, meaning high ratios of performance spend are likely undermining future earnings and cash flow. That led Ehrenberg-Bass Professor John Dawes to propose the 95-5 rule, where brand spend comprised the vast majority – a twist on the 60-40 rule put forward by Les Binet and Peter Field.

ServiceNow’s Raj said it is a bit more tactical than a hard rule. “We're building a pipe now for next year and that is the role of marketing. We're out ahead and we should be driving that. Of course, if there's deals stuck in the pipeline, we should be looking at initiatives about how we can progress that to help the sales teams,” she said.

“We've been hearing about the GFC and mentions about the pandemic. We've all learned things from that period of time – and I think the one thing is around ‘let's double down around brand. Don't just cost cut and pull it out’. We have to be there and stay the course. For me, it's probably doubling down on brand continuing to be there at digital and it's just take a really data driven approach to meet the customers where they are.”

You have to do both brand and demand, Boundy said, declining to put a CBA-approved figure on her breakdown in spend.

“It's all about optimising your budget. It's about making every single dollar work harder,” she said.

On the 95-5 rule unearthed by the Ehrenberg-Bass Institute and pushed by the LinkedIn-funded, NY-based B2B Institute, Boundy is a fan, with caveats. “I definitely buy the principle. I don't know if the percentage ratio of 95-5 is universal. I think it's really different for each category, industry and also audience … So I definitely buy the principle that not all of your customers are in market at any one time, you absolutely have to spend brand dollars for that future priming of customers. But I just challenge whether the ratio is exactly right.”

SME Nirvana

No-one is doing small business marketing well in Australia, Boundy said, challenging B2B Next delegates to prove her wrong.

“People use banking as a utility up to six, seven, eight times a day. And if you're a small business, it's sometimes a lot more than that as well. We have very deep relationships… but do I think it's really hard to acquire new small businesses? Do I think it's really hard to know exactly who to target and communicate? I think yes, it is,” she said. “We do everything from brand marketing. We do highly personalised, lots of sophisticated targeting of customers. We do really sophisticated attempts to actually attract new businesses … We do it all. But do I still think there's room for us to do better? Yes.”

If someone could compile an effective database, or invent a better way to market to small businesses specifically, “That would be Nirvana.”