Article in Brief (Reading time 5 mins.): While the jury is out on whether the US economy is headed for recession, businesses are sending signals that one could be imminent. In this blog post we consider the argument for changing the marketing vs. sales investment mix, review the data on how B2B buyers make purchase decisions, and revisit the importance of content marketing for brands to stay relevant.

The economic winds have shifted in the US. There are many reasons for this, some of them self-induced through monetary policy changes, but we won’t go into that here. Our concern is with what you should be doing about it. 

In our previous post, we described how marketing should change during a recession. In this post we want to dive into the debate that is starting to happen in companies–maybe your own–on what is more important right now, marketing or sales. 

The argument goes something like this: in a buoyant economy your potential customers are actively seeking solutions like yours and so it makes sense to advertise and do other marketing activities that generate so-called “inbound” activities where prospects express interest in speaking to your sales reps. This is the leadgen driven growth model. But in an economic downturn, according to this argument, customers suddenly stop responding to advertising or other marketing outreach. This way of thinking concludes that what’s most important now is sales, that is outbound activity from your sales reps to potential customers. Let’s call this the inbound (marketing-driven) vs. outbound (sales-driven) debate. 

On the face of it, this inbound vs. outbound debate might make sense to you. Recessions are bad (or at least bad sounding though plenty of companies do well) and therefore, you might convince yourself that every company is battening down the hatches and preparing for difficult times ahead. So, if someone makes an argument that says potential customers are going to defer purchases, and therefore are unlikely to respond to marketing during a recession, you might just go along with it. 

Let’s pause to think about this some more. If potential customers are deferring purchases does getting a call from your sales department change the picture?

We believe the inbound vs. outbound debate is a misunderstanding of how the B2B buying process works. Ample data has conclusively established that business buyers are savvy and do extensive research about potential vendors. According to a Bain survey of companies who are involved in buying software and other products, 80% to 90% already have a list of vendors in mind before the search process even begins. Even more striking is that 90% will ultimately choose a vendor from the initial list. 

“We believe the inbound vs. outbound debate is a misunderstanding

of how the B2B buying process works.“

One of the more important ways your potential customers learn about your products and services, according to the Bain survey, is through digital content on your website and other sites where your company is mentioned or reviewed. In other words, if you aren’t actively using content marketing to talk about use cases, customer testimonials, ease of accessing your offerings, and other information that prospective customers are looking for, then you are essentially leaving the field wide open for your competitors. 

Companies that try to use sales staff to mass educate their target market are using resources inefficiently. Consider the cost for an inside sales rep at a software company. Let’s say on-target compensation for this rep is $150,000. Now let’s consider how many prospects they can contact and how many meetings they can actually secure. Our guess would be 5 meetings a week for a very skilled rep. Educating just 25 customers a month for $12,500 is a very expensive proposition. Of course the sales rep will be doing other things as well (forecasting, drafting emails, strategizing, manager meetings, etc.) and in that case the number of successful meetings will be lower and the cost even higher.

So why are companies even considering a reallocation of inbound vs. outbound investments? The simple answer is that business managers are trained to act. Not appearing to do anything differently when economic winds change is unacceptable. Business managers are expected to analyze and prepare a response for how the company plans to react to the coming recession. One idea that managers will surface is prioritizing sales and that means reallocating additional resources, often at the expense of other areas. 

Making cuts in marketing budgets during a recession will leave companies lagging behind their competitors. From our team’s experience running marketing departments during recession, a better approach is to change the mix of internal vs. external resources. 

All companies should know they need to create a steady stream of content that highlights products and services and communicates the essential value proposition for customers. The most successful brands–Salesforce, Mayo Clinic, Tableau–already do this. However, creating content is hard. Consider the cost of an internal, experienced marketing manager, let’s estimate it at $95,000 on average. Let’s assume that one person can create 1 piece of content (for example brochure, white paper, or case study) per week, which is a pretty aggressive schedule when you think about the research and interviews that are required. Tallying it all up, you very quickly see the economics don’t make sense. 

This is why content marketing agencies exist. With a pool of dedicated writers and editors, a well worn development process–and focus on meeting client expectations–content agencies are motivated to deliver more content, more quickly, and at better economics. 

The term “batten down the hatches” comes from the nautical lexicon. When encountering rough seas, ship captains would give the order to secure a ship’s hatch-tarpaulins. Hatches are doors and what the crew would do is close all the hatches and use battens or rods to secure them closed. 

Unlike a ship facing bad weather, a company that responds by battening down the hatches might be doing more damage. While securing a ship from passing bad weather at sea really does improve the chances of riding out a storm, making drastic changes to a business can prolong damage even after the economy has started to grow again. The reason for this is that economic data is only understood in hindsight. There is no accurate, real-time bell weather forecast for when an economy is in or out of a recession. If companies drastically reconfigure their marketing-to-sales investment mix they will likely get wrong-footed and lose out to the competition. The better route is to focus on your customers’ discovery process and find better ways of executing on your marketing objectives. 

(This article was previously published on Linkedin Pulse.)