How BtoB Marketing Budget Will Change in 2023 for Tech Companies
It's no secret that the economy is facing an uncertain future. 2023 is looking particularly grim, with many businesses struggling and facing a major cutback in their marketing budgets.
BtoB companies are no exception to this, and they are already beginning to make changes. For example, instead of focusing on volume-based lead generation, many focus on enterprise focus engagement campaigns that allow them to maximize profit from their limited budgets.
Why would BtoB companies shift their budget to ABM
The key lies in shifting from volume-based lead generation campaigns to enterprise-focused engagement campaigns or ABM (account-based marketing).
This type of marketing focuses on targeting specific accounts and creating tailored campaigns for each one. It puts the customer at the center, understanding their needs and providing them with a personalized experience that establishes trust and creates loyalty.
Companies can use this approach to build deeper relationships, increase brand awareness, nurture leads into sales opportunities, and ultimately.
This allows BtoB companies to target their leads better and focus on the quality of engagements rather than just the quantity. In addition, keeping an eye on customer needs, trends and preferences can create more meaningful relationships with their prospects and ultimately convert more customers into loyal customers.
Example companies that shifted focus to enterprise
Several tech companies are expected to target the enterprise market in 2023, including Salesforce, Box, Dropbox, Zoom, Airtable, and more. Companies such as Salesforce and Zoom have made major pivots in their business strategies over the past several years to focus on corporate customers.
Additionally, newer or emerging software companies such as Airtable are beginning to gain traction with enterprises.
Airtable recently announced a layoff of 254 employees, representing 20% of its employee base. The company said the decision was driven by a need to focus its resources on enterprise customers rather than individual users.
Airtable has also made several changes to its business model, including introducing enterprise pricing plans and targeting larger customers.
This shift in focus reflects the trend among software companies to prioritize enterprise sales over consumer sales.
Larger enterprises challenge smaller emerging tech companies
It is harder for new players to get money from investors because they have to compete with companies that have been around longer. Also, the costs of running a cloud-tech company are getting higher, which makes it hard to compete with other enterprise SaaS companies.
Despite expectations that SaaS companies could benefit from wide-reaching margins, the reality is far less rosy. According to McKinsey's data, barely a third of businesses in this sector have met even their most basic benchmark—the Rule of 40—of combining revenue growth and profit margin for over 40%. Even fewer have been able to maintain it long-term.
Small companies must keep improving their products, agile, and developing new things to compete against bigger companies. But this doesn't leave much room for making a profit. So to survive, smaller companies in these markets look at getting bought by a bigger company as a way to exit and access the large group of customers that the bigger company has.
Challenges ahead for emerging tech companies
Bigger companies in the SaaS industry are buying smaller businesses to help them grow. This is making the costs of SaaS acquisitions go up over time. However, the increasing values show that the SaaS industry is growing quickly.
However, if the 2023 economy is grim, these small emerging tech companies must continue demonstrating growth. Companies likely need to focus on a hybrid approach to their BtoB marketing strategies. This means continuing to invest in lead generation and enterprise-focused engagement campaigns.
By doing this, companies can better target new and existing customers, retain loyal customers, and increase overall revenue to make them more valuable for larger enterprises to acquire them.
The challenges ahead for emerging tech companies are immense. But with the right strategies, they can focus on growth and profitability while maintaining competitive advantages over their larger rivals. That way, when 2023 rolls around and the economy looks grim again, these companies will be prepared to take on whatever comes their way.
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