Digital_Connections_2.0_Report (1).pdf

THE CUSTOMER IS BACK
DIGITAL CONNECTIONS 2.0
Why CMOs are refocusing on
the customer journey for 2023

Contents
Introduction 1
Executive Summary 2
Commercial Goals 3
The Customer is Back 4
Challenges for CMOs 5
Rethink for Martech 6
Final Thoughts 7
About Modern 8

Introduction
Revealing the strategic
imperatives for CMOs in 2023
1

In early 2022, we released our Digital Connections report which revealed the
challenges, priorities and attitudes of CMOs working in B2B for the year ahead.
In this follow-on report, Digital Connections 2.0, we outline how priorities,
plans and expectations have changed for 2023.
It is evident that while investment in martech continues apace, global economic
challenges have led to a renewed emphasis on customer value and return
on investment.
This represents a strategic shift that takes marketing back to its fundamentals
and has major implications for data integration, training, skills and
marketing programmes.
About Digital Connections 2.0
We commissioned Censuswide, a global insight
driven research company, to survey 300 CMOs
in B2B companies with 1,000 or more employees
in the UK and US. Their responses reveal the top
marketing technology priorities, challenges, and
aspirations occupying their agendas over the
coming 12 to 18 months.
Modern | Introduction
Introduction

Executive Summary
A 50% fall in the rate of global
growth is fuelling a return
to fundamentals
2

1IMF World Economic Report October 2022
2GoldMan Sachs Macro Outlook 2023 This Cycle Is Different November 2022
Modern | Executive Summary
Global events are impacting economies
Around the world governments have been tackling the impact of inflation
on people’s lives and the political and economic instability that causes.
Financial conditions have tightened almost everywhere with global growth
forecast to slow from 3.2% in 2022 to just 2.7% in 20231, with some even
predicting this is more likely to be 1.8%.2
Acquisitions and mergers bring challenges
On top of this, the tech sector experienced a particularly turbulent time,
with a spate of headline-making acquisitions and layoffs.
Last year’s report put the spotlight on the chronic underuse of technology, and
the industry wide lack of skills to deliver against strategic goals.
The aim of marketing is
to know and understand
the customer so well
the product fits them
and sells itself.”
With a series of global and domestic challenges that severe economic upset,
including inflation, disrupted markets and broken supply chains, CMOs are having
to adapt to a new status quo.
Executive Summary
“
Peter Drucker, Marketing guru

Last year, Digital Connections reported CMOs rapidly
expanding roles and responsibilities. This year’s data
aligns with industry predictions that B2B companies
will pursue more predictable growth strategies, with
CMOs returning to a more traditional role.
This year, Digital Connections 2.0 reveals CMOs are now looking at getting more
value from their tech investment, with a renewed emphasis on shorter term
commercial goals – growth and ROI - driven by economic uncertainty.
Economic uncertainty is setting short term goals
So while B2B marketing technology spending is still
forecast to increase in 2023, the emphasis will be on
exploiting what you have more fully.
To do that, businesses are refocusing on the customer experience, identifying
insights, and creating a marketing technology strategy that’s built around their
journey. Which puts the customer right back at the centre of marketing.
Modern | Executive Summary
What will happen to the role of CMOs?

Commercial Goals
A major shift in strategy sees CMOs
re-focus on commercial imperatives
3

Now, in uncertain economic times, budgets are under increased scrutiny.
The majority are looking at how they can make an impact on growth,
improve customer experience and marketing efficiency.
CMOs are being tasked with short term growth
Our data shows there is an 300% increase in CMOs
putting growth as a major priority in 2023 when
compared to last year.
0
Are already
seeing ROI
Are looking to
see ROI in less
than 9 months
Have expectations
of seeing a return
somewhere between
9-18 months
Do not expect to see a
return of the investments
they’ve made for
at least 18 months
17%
37%
40%
31%
28%
14%
40
30
20
10
2023
2022
10%
23%
ROI expectations from martech investments
3eMarketer US B2B Martech Spending Forecast 2022
Modern | Commercial Goals
12 months ago B2B marketing leaders were focused on delivering innovation
and integration into their organisations in order to justify the significant
investment made in Martech.
Commercial Goals
In 2022, only 20% of CMOs cited these as their top priorities, but this year’s
results show that nearly 75% are putting short-term company commercials above
longer-term goals.
48.3%
10.7%
5.9%
26.5%

In theory, marketing
technology platforms
should be supporting the
marketing processes,
enabling us to work at a
pace and required volume.
They should be giving us
reporting on which of our
marketing activities is
working and which isn’t.”
Where will growth come from?
The question that begs is where that growth is going to come from - increased
investment in martech or more effective deployment of what they already have.
Despite global economic conditions, B2B marketing technology spending is
forecast to increase in 2023. However, the rate of growth is expected to slow.3
42% of respondents are looking to invest more in marketing technology as
a response to the economic climate.
This points to an ongoing boom for martech solutions, with 29% of CMOs
already spending over £5m annually on technology.
But CMOs are now less optimistic about ROI from their investments. Those
expecting returns in less than 9 months decreased from 22% to 17%, while
those anticipating ROI over 18 months (and in some cases, 3+ years)
rose from 28% to 31%.
Concern about returns in the short term
Again, it’s certainly true there have been improvements in teams’ abilities
to upskill and execute, which should help meet the demand for growth.
“
Nick Webb, CMO, CloudPay

As recruitment and training budgets inevitably
come under review, CMOs will be forced to look to
external B2B digital consultants to access the digital,
technological and communication skills to develop
marketing programmes with effective customer
journeys, returning to a more traditional role.
The levels of knowledge and understanding around martech across organisations
have increased, allowing CMOs to make more informed decisions about how they
integrate data, find efficiencies, and identify which platforms and technologies to
put at the centre of their plans.
Customer experience an easier short-term win
However, CMOs are now thinking tech investment alone or even adding new
features is not going to be enough, or that it is going to take too long to deliver ROI.
So their focus is shifting back to the customer and how they can better exploit tech
and other tools to improve the experience in the shorter term.
If you could characterise the impact you aim to deliver
in your current role, which of the following would it be?
How will CMOs fill the skills gap in 2023?
0
Growth
Better customer
experience
Efficiency
Integration
Innovation
21%
19%
15%
13%
36%
17%
34%
30%
40
30
20
10
2023
2022
10%
5%
300%
400%
20%
50%
65%

The Customer is Back
Better customer experience is the
key to delivering short term growth
4

In 2022 CRM was the least selected focus for martech spend. However, this year, it
ranks as #2, only behind marketing automation. Why? With budgets under scrutiny,
marketing leaders are having to rethink their entire approach.
CRM returns to the centre of martech strategies
The top priorities now are how they can affect growth through better customer
experience and efficiencies. In fact, nearly 75% of CMOs are putting impact on the
bottom line above more future focused goals.
The first hire in the
marketing operations
role should be a
strategic analyst to
focus on developing ROI
measurements. Once the
tracking is in place, then
everything else should
be aligned.”
CMO, survey participant
Modern | The Customer is Back
With commercial goals set to dominate the agenda, CMOs are now considering
more predictable growth strategies for 2023.4 Over the past couple of years
they looked to emerging technologies to provide new capabilities. But changing
priorities have paved the way for CRM’s moment to shine again.
“
4Forrester Predictions 2023 Fortune Favors The Bold And Focused
The Customer is Back

The most significant change is those CMOs putting “Better customer experience”
at the top of their list. This shot up from 5% to 21%, an increase of some 400%,
illustrating the need for this rethink to be centred on meeting customer needs.
Martech needs to deliver on customer experience
This puts the customer right back
at the heart of marketing technology
decision-making in 2023.
Commentators suggest a refocus on the customer
could point to a wider shift in B2B strategy with
brands questioning product-led growth and baking
customer insights into their innovation process,
using them as the basis for ideation, integrating
customers into product development.5
Businesses are looking at getting their tech investment to deliver by refocusing on
the customer, identifying insights, and creating a marketing technology strategy
built around their journey.
Will customers play an even bigger role?
5Forrester Seven Fallacies of Product Led Growth That B2B CMOs Must Address August 2022

This shift in strategy is reflected in anticipated investment. The market for
Customer Data Platforms (CDPs) is forecast to grow to nearly $7bn USD by 2029,
at 25.4% CAGR.6
Significant expansion in Customer Data Platforms
These figures indicate the significance placed on information and analysis that
allows organisations to develop and improve relationships with their customers.
The skills necessary for effectively managing and integrating data, as well as
developing successful customer journeys and communications, are distinct and
may not always be possessed by the same individuals or teams. Organisations must
ensure they have the necessary capabilities in both areas to maximise the return on
their investment in CDPs.
0
Better customer
experience
39%
30%
37%
27%
40
30
20
10
2023
2022
31%
48%
30%
40%
50
48%
Skilling the team
to meet current
priorities
Generating leads
and sales
Strategic priorities over the next 18 months
6Fortune Business Insights “Customer Data Platform Market 2022-2029.” March 2022

Rethink for Martech
A change from significant investment
in martech to improving its use
5

In 2022, 31% of CMOs said that lack of knowledge or resistance to change from
marketing teams was the biggest factor for marketing tech stacks not being used to
their full extent. This year, that figure has dropped by a third to 22%.
A growth in tech skills
While these human factors are still a reason why martech is not being used to its full
extent, they are less frequently seen as the “biggest” factor.
We need more digital
integration technology so
we can adopt the latest
cloud-based platforms
which then would deliver
better customer service.”
Unsurprisingly, that honour now goes to data and integration (up from 14% in 2022
to 21% in 2023). With last year being a record year for mergers and acquisitions,7
the challenges of integrating systems and getting data flowing smoothly - as well as
the additional burden of integrating technologies across formerly separate entities –
represent a daunting task for both CTOs and CMOs.
Data and integration the biggest barrier
Modern | Rethink Martech
The biggest area of progress has been
in upskilling teams.
7KPMG 2021 Was a Blowout Year for Global MA
In last year’s report we found that two thirds of organisations were using less
than half of their martech stack’s functionality, this year that number has fallen
to just 37%.
Meanwhile, last year only 4% believed they were using over 75% of their
tech’s functionality, this year, that figure has shot up to 29%. This is good
news for marketers in terms of getting value from their investment and
one reason has been an improvement in training and skills.
“
Rethink for martech

The role of technology in marketing looks set to be more important moving
forwards, albeit with a greater emphasis on addressing and developing martech
strategies, which was referenced by almost half of all CMOs.
Changing priorities in 2023
Be wary of just going to
one vendor, you need
someone who is neutral
and platform agnostic,
who can guide you and fix
a problem at its source.”
In fact, increasing the role of martech – by expanding stacks, improving capabilities
and closing the skills gap - was high on the list of almost all CMOs, with a significant
number (37%) looking to ensure the strategy better connects it to improving
customer experience.
Connecting martech to the customer experience
Despite this, a plan to reduce costs through consolidation was listed by 35% of
CMOs who will be looking to make difficult decisions when it comes to the value
they’re getting from their technology.
Reasons for tech stack not being used
18%
10%
16%
1%
17%
21%
13%
4%
“
21% - Data and integration challenges
18% - Poor useability or irrelevant
17% - Change of marketing strategy
16% - Lack of knowledge in team
13% - Resistance to change from team
10% - Lack of support from vendors
4% - Is being used to full
1% - Other

8Gartner Disruptions Derail Progress in Martech Utilization September 2022
Martech priorities over the next 18 months
Data integration is the biggest reason martech is
being underused, with skills and capability lacking.
Gartner’s 2022 martech study8 found that 60%
of buyers are trying to address by specifying
a one-stop-shop for tech rather than a
best-of-breed approach.
Is there a short-cut to integration?
Developing technology
strategy
0 40
30
20
10
Closing the digital skills gap
in our business
36%
50
Connecting martech to
customer experience 37%
46%
Enhancing capabilities
around data 41%
Expanding our marketing
technology stack 40%
Consolidating marketing
technology stack 36%

Challenges for CMOs
Delivering on short term goals without
major investment or internal resource
6

Customers expect a
user-friendly and smooth
online experience so
delivering a seamless
and highly engaging
UX would be a powerful
marketing tool.”
Modern | Challenges for CMOs
However, there are two significant flags in this data which CMOs
will have to address in 2023.
This report shows that the overall percentage of marketing technology
functionality being used has increased with an improvement in skills
and knowledge in marketing teams contributing to this.
“
1.
Underuse of customer-centric platforms
The most underused platforms in marketing technology are Marketing
Automation (37%) and CRM (31%). These two platforms are highly significant
when it comes to delivering the better customer experience that many CMOs are
now looking for.
2.
Skills gap in marketing automation
20% of CMOs said that Marketing Automation will be the focus of their martech
spend over the next 12 months. But it’s also the area that’s identified as the #1
biggest skills and capability gap (32%). Social Media (9%) and CRM (9%) – both
inextricably linked to the customer - were the next highest.
Challenges for CMOs

But those looking for growth will be prioritising brand development
and skilling the team to meet their strategic aims.
Prioritising brand through the customer journey
And when it comes to the complete digital sales experience, they are more likely
to view sales enablement as the most underused part of their technology stack
and more likely to view website experience as a skills and capability gap.
You need a trusted
partner because very few
marketing departments
have the internal
knowledge and experience
to identify issues,
document requirements,
assess options and
then implement.”
As their biggest discretionary spend, CMOs
know they need to get their tech stack working
much harder for them.
These are important capability gaps that need to be addressed under an
increased scrutiny over budgets and corporate nervousness caused
by the ROI on martech investment taking longer than anticipated.
Addressing the challenges for 2023
CMOs will have to continue to look at tech investment to help address
these issues with 42% of them spending more on their marketing
technology, but this year with an emphasis on automation.
“

To ensure the goals of growth and increasing revenue are met within the shorter
term there seems to be little doubt that CMOs will be outsourcing a range of tasks
to B2B digital consultants who have the skills and experience to create successful
CRM programmes, driven by tech.
0 40
30
20
10
2023
2022
50
Improving customer
experience
32%
25%
20%
25%
25%
70%
30%
20%
42%
Increasing overall
revenue
Keeping up with
competitors
Key drivers behind marketing technology strategy
A good partner will be able to help you choose the
right tools; build an integrated stack aligned to the
customer journey; increase value from your stack;
set expectations for results; provide a more objective
analysis of data; offer support throughout the
process; inform and guide your marketing strategy.
What should a CMO expect from a B2B partner?
Provided the budget is available, specifying martech for CRM is relatively
straightforward when compared to the challenge of recruiting people with
experience to exploit it or training up existing staff - especially at a time recruitment
and training budgets are frozen or limited.
Bridging the skills gap in the short term

Final Thoughts
CMOs will meet the challenges of 2023
by focusing martech on the customer
7

The response to 2023’s unique combination of challenges has been the C-suite
setting shorter term, commercially focused goals with returns visible over the next
12 to 18 months. It’s now a case of getting legacy martech investment to work
effectively to deliver on these.
Most CMOs, but not necessarily all, are putting the customer experience at the
heart of this shift in martech strategy – looking to AI and automation tools to provide
a smoother, simpler and smarter customer journey.
There are significant challenges inherent in this, not least a skills shortage within
client companies. And the well-documented problems associated with integrating
technologies and systems remain.
It will be interesting to document the progress made by CMOs over the next 12
months. But putting the customer at the centre of their marketing has to be the right
step. After all, it’s where they should always be.
Leveraging Marketing
Automation and AI is
a great way to deliver
excellent customer
experience but also
to keep your sales
teams motivated.”
Modern | Final Thoughts
There’s no doubt that the uncertain economic forecasts for 2023 have made
businesses nervous about over-committing on further martech investment.
Especially when any potential returns will be a long way down the road.
Final Thoughts
“
Helen Wilson,
Director of Technical Strategy,
Modern

About Modern
Helping clients improve customer
experience through strategy,
technology and execution
Through long-lasting partnerships, we support our clients to shape change through
technology, strategy and execution of programmes designed to enhance the
customer experience at every part of the buying journey.
We provide expert technology advice from our multidisciplinary team of strategists,
technologists and digital and data experts to support the CMOs vision to deliver
organisational growth in today’s complex market.
Modern challenges the status quo to unlock the potential behind technology.
Partnering with forward thinking CMOs and business leaders to help them transform
their marketing function; connecting technology with customer data
and in-depth insight to add more value to the business.
Let’s Connect
t: +44 (0)117 332 6700
e: info@modernb2b.co
w: modernb2b.co

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