Forrester's Three Drivers of the Best B2B Growth Engines
It’s harder than ever to satisfy B2B buyers. Eighty-three percent of buyers in 2022 said that they were dissatisfied with the winning provider after completing a purchase. Marketing, product, and sales leaders need to be at the top of their game. Business buyer demands and the intricacies of business-buyer behavior will only increase and keep intensifying the competition for growth among B2B organizations.
The average B2B buying cycle is more complex than ever, involving three considered vendors, four separate departments, and eight people in the buying group—four of whom are outside the buyer’s company. But buying is also more streamlined: Most buyers completed their organization’s purchase in less than six months, and only 14 percent of buyers conducting purchases of $1 million or more reported that their purchase took more than a year. More than half of purchases involved digital transactions, so a digital sales and marketing strategy is now table stakes. Meanwhile, the number of partners needed to grow revenue is going to increase and become more complex. There are truly a lot of external forces for B2B growth leaders to juggle.
It may seem like everything is on fire and that there’s no formula for competitive growth when there are so many things outside your control. But what actually causes B2B growth engines to stall or break down, and what do the best growth engines look like? Forrester Research recently completed a study involving hundreds of marketing, product, sales, and technology leaders to figure out where profitable, predictable, sustainable growth comes from and what the best growth engines consist of.
Two things from Forrester’s study on B2B growth were very clear. First, B2B companies that stop growing tend to lose focus on three key fundamentals that power their growth engines. Second, when companies lose sight of these fundamentals, marketing, sales, and product leaders tend to over-rotate on short-term strategies that aim to extract value from customers instead of prioritizing customer value creation.
Forrester’s research unveiled the three fundamental drivers of the best B2B growth engines and used them as the basis for a new growth strategy model called the B2B customer-obsessed growth engine. Forrester has found that organizations we’ve determined to be customer-obsessed are three times more likely to achieve 10 percent or higher growth in revenue, profits, and customer retention than companies that do not qualify as customer-obsessed. Here are the three drivers of Forrester’s customer-obsessed growth engine:
1. Business buyer value. In terms of B2B growth, customer obsession means putting business buyer value at the center of vision, strategy, and execution. Forrester found that organizations need to use a variety of buyer insights and empower employees to engineer value across the organization’s entire ecosystem.
2. Revenue team alignment. It takes highly aligned marketing, product, and sales teams to deliver and exchange ecosystem value efficiently and consistently. Forrester found that winning in B2B requires marketing, product, and sales to be aligned around buyer value, not only internal processes.
3. Technology integration. Technology must be interlaced with revenue team alignment and buyer value to help power the growth engine. Forrester found that B2B organizations need to go beyond technical competence to master technology-led innovation. Forrester also found that partnerships with technology functions are critical to sharing technology competencies across teams and individual leaders who do not consider technology to be a personal strength.
Forrester also found that the best growth engines are conceptually simple yet challenging for some organizations to execute. It’s easy for organizations to say that they are putting customers first or aligning teams or using technology more holistically. But organizational friction can turn into gridlock when initiatives take shape and start to tap the resources required to develop and sustain a winning growth engine.
As the competition for growth continues to challenge B2B organizations, Forrester’s advice for all organizations building and optimizing a growth engine is to keep an outside-in perspective. Let customer obsession and the voice of the customer challenge internal thinking and lead the organization to change and achieve growth together.
John Arnold is a principal analyst at Forrester Research. Based in Massachusetts, Arnold helps B2B organizations grow revenue with marketing strategies for a digital-first world. He is an expert in frontline marketing strategies and the cocreator of Forrester’s life cycle revenue marketing approach.