B2B Marketing Strategy for Software Companies: The Ultimate Guide
Running and growing an IT company was never an easy task. Now, on the one hand, thanks to technological development, there are plenty of new marketing channels and tools which can make your work easier and contribute to creating a lot of new sales opportunities. On the other hand, you also have to compete with technology companies from around the globe and adapt to the continuously rising expectations of your clients. If you don’t want to get left behind, no matter the size of your firm, you need an excellent B2B marketing strategy – one that will tell you how to achieve your business and marketing goals, what to do and what not to do, what you are offering and to whom. This article will explain what a strategy is, why it is needed, and how you can develop one that contributes to the growth of software companies.
What Is a Marketing Strategy?
Imagine that you have a big decision to make – you’re buying a house. Are you going to pick the first one you see? Probably not. Before it happens, you first decide what your needs are, what your budget is, and research the available locations. When faced with any other big decision in your business, you should act in a similar way. In other words, you should have a strategy (a simple action plan isn’t enough).
A marketing strategy is a detailed “roadmap” or a “game plan” created to help your company gain advantage in the competitive IT market. It is developed in accordance with the overall vision of your business, and tells your team what to do and what not to do in order to achieve your business goals.
With so many opportunities and competitors in the IT industry, managing your company without a B2B strategy is a grave error; such an important aspect cannot be overlooked if you want to grow your business further and see actual results from your marketing efforts. Your team can’t simply wing everything as they go – they need something to guide them.
Before we move forward, we have to clarify some concepts that are often confused. First of all, the difference between the terms “marketing strategy” and “marketing strategies.” The first one refers to, as has been already mentioned, certain high-level assumptions that constitute the foundation of a company’s marketing activities aligned with business goals. The other one, however, is a simplification commonly used to describe various marketing tactics and techniques that can be part of the strategy, such as paid advertising, inbound marketing (or IT lead generation). Another two terms that should never be used interchangeably are “plan” and “strategy”. Long story short, a strategy is your overall philosophy, whereas a B2B marketing plan refers to all the marketing activities that your company is undertaking based on the strategy. We explain this difference in detail in our article on writing a marketing plan for software development companies. These differentiations will come in handy in later portions of the guide.
Why do Software Companies Need a Strategy?
Why is having a strategy important? Does every tech company need one? You might still be wondering whether or not having a marketing strategy is worth your effort put into research and strategic planning. While you could be tempted to run, for instance, your lead generation campaigns straight away (and plenty of IT companies do indeed do that), the results will probably not live up to your expectations. If your marketing team doesn’t understand your clients, isn’t targeting the right audience and doesn’t use the right marketing channels, there will be no response (or business results), no matter how attractive your campaigns are. That’s because the message isn’t getting through to your clients – it’s either not what they need or expect, or what you’re providing them with has little value.
Besides, without strategic planning, you probably don’t even know how to achieve your business goals. That’s one of the reasons why you should think about creating an efficient and clearly defined strategy for your IT company. What are some of the other reasons? Take a look at the numbered list below.
1. B2B strategy gives your marketing team clear guidelines
In order to deliver measurable results for your software house, your marketing team needs your business goals and objectives to be crystal clear. Without such basic high-level assumptions, the probability of increasing sales in your IT company (for example by acquiring new clients or improving the loyalty of existing ones) drops drastically because there’s nothing that guides your organization in the first place. How will members of your team know what the most important goals are and what B2B strategies they should focus on to achieve them? How can you build a competitive advantage and strong position in the IT industry? To answer these and other questions, you need a strategy roadmap – good guidelines that will allow you to diagnose problems, get the big picture of the market and competitive environment, and understand the direction you’re headed with your business.
2. Strategic approach allows software companies to focus on long-term objective
What follows from the point above is that an effective marketing strategy tells you what you should do and what you shouldn’t do to achieve your business goals. It guides you, helps you focus on what matters in the long-term perspective, and allows you to avoid unnecessary distractions.
Let’s assume that you run a software development company that specializes in crafting digital products for B2B corporate clients from the fintech and telecommunication industry. A CEO of some startup reaches out to you – they need an application and have a budget to build it. Would you decide to jump on this opportunity? While it may be good money, you should first ask yourself whether or not it’d bring you any closer to achieving your strategic objectives and help grow your business in the long run. A digital marketing strategy is very useful for such situations because, apart from helping you set your priorities, goals, and objectives, it also makes you more likely to stick to them.
3. It helps companies stand out in the IT market
Although there’s a lot of preaching about marketing strategies, not all software development companies have a business strategy in place. The good news is that if you’re competing with smaller IT firms, having a strategy might help you stand out from the crowd and make you a more desirable business partner. If you want to take on industry leaders, however, a B2B marketing strategy might be essential to compete with them, increase market share, or enter a new market. No matter the situation, a solid marketing strategy allows you to differentiate your firm from other software companies, build a thriving business, and better adapt to the ever-changing IT market. Followed by a solid strategy execution, it might help tech companies increase sales and revenue and build a strong position in the market.
4. B2B marketing strategy helps technology companies better understand their clients
A good strategy always starts with in-depth research – internal and external – that also includes your B2B clients, the current and potential ones you want to target. Why is it important? Directing your communication to everyone won’t get you far simply because only a handful of those listening is actually interested in your products and/or services, and an even smaller number makes sense for your business.
Taking time to do your research helps B2B marketers find the right answers. Who is your target audience? And why them? What are some of their most important pain points? What problem do your products and/or services solve for them? What value is your IT company providing or should provide? How to reach them and what type of communication suits them the best?
Asking the right questions, and then drawing conclusions, will help you not only understand with segments to serve but also get all the answers you need to better understand your clients and hence improve your communication and marketing operations at further stages. Furthermore, It will help you acquire new clients and improve the retention and loyalty of your current B2B clients, which will allow you to increase the stability of your business and build a competitive advantage in the IT market.
5. It helps you spend your marketing budget and allocate resources wisely
In today’s fast-paced marketing world, you might be tempted to spew out ideas like there is no tomorrow – especially if you see your competitors launching new, successful campaigns or find a new set of tools to use on your own. If you’re a marketing manager or a CMO, you should steer clear of the shiny object syndrome, no matter how exciting they might seem – being responsible for marketing means, first and foremost, being accountable for business results.
History is full of inventions and other bizarre products that someone really wanted to release into the market, but which didn’t make a lot of sense from a business perspective. This is why you should carefully gauge whether these new exciting ideas, which are likely to consume a significant portion of your marketing budget and take up a lot of your time, can be expected to produce measurable business outcomes.
For software companies a marketing strategy should be a main point of reference helping to decide what is worth investing their time and marketing budget in. Like a Polar star for olden-day navigators. In essence, it makes it easier to make informed business decisions on a day-to-day basis and prioritize certain tasks over others based on their correlation with set goals.
6. Marketing strategy helps software companies achieve their business goals
Every CEO has some kind of vision of their company. To make this vision reality, they’re likely to set different business and strategic goals, such as an increase in profits by X% or to grow the firm in a specific direction. The question is, how to cascade these high-level assumptions and objectives into day-to-day operational activities? A marketing strategy helps B2B companies to do so, step by step. Breaking down these business goals into smaller steps – marketing goals (and then into strategic, tactical and operational goals) – allows your marketing and sales teams to direct their efforts on activities that actually matter and have a visible impact on your company’s growth. These digital marketing goals might translate into expectations related to increasing sales (for example by 25% in Q1 by acquiring new clients from another market segment or by acquiring bigger deals or winning more deals with your current business partners) or increasing market share.
At the strategy execution level marketers have to assign specific KPIs (key performance indicators) to them, in order to measure the effectiveness of their activities, monitor their progress, and adjust their activities on a daily basis, based on data.
What Are the Key Elements of a Marketing Strategy?
Understanding the definition is the first step, but developing a B2B marketing strategy that actually works takes much more than that. Below, you’ll find a list of items that should be included in a strategy for tech companies:
a list of marketing goals and objectives,
a market analysis and competitors analysis,
a description of your target market and your audience,
a detailed description of your products or IT services,
a statement about what makes you stand out from the competition,
your UVP (unique value proposition) and mission statement,
B2B marketing strategies, tactics and tools you plan to use,
marketing channels crucial for your company’s communication,
your marketing budget.
Think of it as a long-term, custom-made guide for your business’s marketing activities. It’ll tell you what direction your software company should move in and what actions your marketing department should take to meet set business goals.
How to develop a marketing strategy for B2B companies?
Now that you know why having a strategy is crucial for IT companies and technology businesses, you might be wondering how to actually develop one. Where do you even start? What does a good strategy execution require? Don’t worry. Below, you will find a step-by-step guide on how to create a marketing strategy for B2B companies and actually stick to it.
1. Define marketing goals for your IT company (based on your business goals)
As we mentioned earlier, a good marketing strategy requires clearly set marketing goals that are based on business goals (and aligned with them). Bear in mind that your goals should be always specified. It’s difficult to achieve something that doesn’t have a concrete, quantifiable value assigned to it. For example, “an increase in sales and revenue” is not a proper goal because it doesn’t specify any particular point at which the goal will be met.
If you don’t know how to set your B2B marketing goals, one way to do it is to use the SMART method. It’s a strategic framework that helps people define their objectives, plan in detail how to achieve them, determine what resources are needed to meet them, and set deadlines for their completion.
For your B2B goal to be SMART, it has to be:
Specific – What exactly does your marketing team want to achieve? The more detailed your goal is, the better
Measurable – How will you track the progress? And when will you know that you have achieved your goal?
Achievable – Is your goal realistic? Do you have enough time and resources to succeed?
Relevant – Is the goal related to your business vision and strategic goals? If not, you could quickly lose motivation to pursue it.
Timely – by when do you want to achieve your B2B goals? It’s much easier to follow the progress if you have a set deadline for each of them.
Some marketing guides also recommend adding two more letters to the SMART system. Those letters are E and R which mean:
Ethical – Is your goal aligned with moral compass of your firm?
Recorded – Are your company’s goals and actions that must be taken in order to achieve them all noted down? This will help tremendously in case you lose focus or engagement of the entire team involved.
Setting company goals that are SMART (or SMARTER) is a great way to increase the chances of a successful strategy implementation and reaching your objectives without getting sidetracked or realizing that they’re unrealistic.
2. Analyze your competitors and your business
Whatever your software company offers, there are sure to be plenty of other businesses providing similar products and/or IT services. To gain competitive advantage and differentiate your software house from competitors, you need to understand not only what makes your tech company stand out in the IT sector but also to identify the most prospective opportunities for your business. It’s impossible without a proper analysis – both internal and external ones. That is why before crafting a marketing strategy for your technology company, your team has to carry out in-depth research and conduct:
a market analysis
a competitive analysis
an internal analysis of your company’s strengths and weaknesses
Don’t focus just on what your competitors offer and what their websites look like; you need to do thorough research, including their products and pricing, their communication strategy, their value proposition and positioning in the market, etc. Armed with such knowledge, you can compare your company’s strengths and weaknesses with those of your direct and indirect competitors, and find areas for improvement as well as opportunities to differentiate your IT business from other firms in the market.
3. Define your target audience
Clients are an essential part of any business, and the only reason it exists in the first place. Simply speaking, you can’t build a profitable firm without clients. Aiming for any audience regardless of their industry, size, and location doesn’t make a lot of sense from a business perspective. If you’re aiming to sell your IT services or products to healthcare companies, reaching out to a local garden shop is pointless, isn’t it?
As a CMO or a B2B marketer, you need to pick a specific group (or groups) that are the best for your business and which will gain the most value from your IT products and/or services. How can you find such a group? You need to carry out extensive market research and analysis of your industry, competition, trends, and a range of other important factors that show potential for business growth. With a clearly defined target audience, you’ll be able to define the buyer persona for a given segment further down the line.
4. Define a unique value proposition (UVP)
The main question all your potential B2B clients will ask themselves is, “Why should I work with this IT company?” That’s actually an excellent question – why should they buy from you? What differentiates your software company from your competitors and in what way are you better from other technology firms? What will your clients gain by choosing you? The answer to all these questions is included in your unique value proposition (UVP). It’s a set of benefits that meet the individual needs of your clients – specific segments – and which show them the unique value that your company provides. What you can call your UVP is dependent on your target audience. Some clients value experience, while others are looking for partners who provide the lowest price or deliver the product quickly. Don’t forget that the “U” in “UVP” stands for “unique”: you have to offer something that the competition doesn’t.
5. Choose marketing channels, tactics, and metrics
The number of marketing channels available is far bigger than just a decade ago. Besides traditional methods, such as mass media advertising, there also exist digital ones: email marketing, social media, websites, and search engines, to name just a few. But appearing on all of them is impossible (and pointless) – rather than being in all places at once, you should choose those frequented by your clients. So you need to pick traditional and digital marketing channels where you are most likely to reach your target audience. In other words, where do you expect them to see or hear about your brand and interact with your software company?
6. B2B marketing KPIs
Every IT marketer or marketing consultant will tell you how important it is to choose relevant marketing KPIs – B2B metrics to track your progress. With their assistance, your marketing team can see whether your business is headed in the right direction and deal with potential obstacles in advance. What’s more, with KPIs you don’t have to wait until the end of a particular project or campaign, as they allow you to monitor everything on the fly and adjust your marketing activities to reach your goals. The list of all possible Key Performance Indicators (KPIs for short) for a B2B company is relatively long, so you need to think twice about which will be of use to you. They should primarily depend on what you want to achieve. Tracking the wrong marketing metrics will give you a wrong idea about how your business is doing and what marketing tactics work or not, so take your time choosing them wisely.
7. Plan your marketing budget and resources
Imagine being midway into a great marketing campaign only to find out you’ve gone way over the budget or you don’t have enough money for some unexpected expenses. It’s nerve-wracking, isn’t it? This is why planning is a crucial part of a marketing strategy for software companies as well.
How much should you be spending on marketing? What is a good marketing budget for an IT company? It depends on many factors including your business goals, your company’s stage of business growth, the scale of your operations, the size and structure of your marketing team, the markets you operate in, etc. While there’s no one-size-fits-all solution and your budget should be adjusted to the needs of your software house, we have a simplified market benchmark that can serve as a starting point for assessing the marketing budget for your company.
Generally, it is assumed that companies operating in the market for up to 5 years should spend on average 12-20% of their revenues on marketing activities, and fast-growing companies that operate in the market for more than 5 years should allocate 6-12% of revenue on marketing.
Of course, these are only approximate values. Budgets of IT companies tend to vary a lot, and it isn’t always the case that the money is allocated at the level of strategy (because many hi-tech companies still don’t have it or because fast-growing businesses sometimes need to increase the budget during the year to better adapt to the situation).
A B2B Marketing Strategy: Final Thoughts
With the global business market being so crowded, you can’t afford to come in unprepared. Your B2B marketing strategy is a kind of roadmap which shows the direction your marketing efforts should be geared towards. A detailed and well thought-out strategy will help you tremendously in growing your software development company by giving you the opportunity to stand out from your competitors, deliver better value to your clients and reach your goals.
Creating a strategy that delivers business results may seem an easy task; however, in reality, it can be difficult even for experienced CMOs (let alone marketing managers who are doing it for the first time). Mistakes are made both at the stage of strategy formulation and during its implementation. What are the mistakes you should avoid at all costs? We’ve compiled a list of the most common mistakes associated with creating and implementing a marketing strategy in this article. To avoid them, you can consider working with a boutique strategy consulting firm specialized in IT.