The Changing Rules of B2B Marketing

The B2B Difference

Why are B2B companies different and why do they justify a social media book just for them? For one thing, B2B marketers quietly spend about $80 billion per year. For another, they are far more entrenched in social channels than they are given credit for. Business.com reported in late 2009 that 81% of B2B companies maintain company-related accounts or profiles on social media sites versus 67% of B2C companies. The same study also found that three out of four B2B companies have a presence on Twitter compared to half of B2C companies.

There are big differences between selling to organizations and selling to individuals. Let’s look at a few:

B2B marketing is much more likely to focus on value than experience. This distinction isn’t absolute, of course; makers of automobiles and dishwashing detergent also figure value into the equation. But in nearly all B2B decisions, value is the driving force. Value can be expressed in many ways, including price/performance, the fit with the customer’s business objective, flexibility and compatibility with existing systems. The point is that the “Wow!” factor that is so important to many consumer buying decisions rarely means much in business engagements. In fact, flash obfuscates the clarity that business buyers need.

B2B buying decisions are made by groups, whereas consumer buying decisions are made by individuals or families. This has huge implications for marketing. B2B marketing programs must influence multiple people at multiple stages of the buying process and each of those individuals has different priorities. The CFO, for example, is focused on return while the product manager may be thinking more about user experience or lead generation.

For this and other reasons, business buying cycles are longer than consumer buying cycles. This is primarily because more dollars are at stake and more people are involved in the decision The choice of packaging machine ry for a manufacturing plant, for example, impacts that company’s ability to deliver its product to the marketplace, which in turn affects its sales and stock value is. With so much at stake, decisions often involve many rounds of meetings and may take a year or more to conclude.

Business buying decisions are more likely to be a commitment than consumer buying decisions. Products like enterprise e-mail systems or aircraft engines will live with the customer for a very long time. Issues such as the viability of the manufacturer, its quality of support and its future product roadmaps have significant influence on these decisions. Once the sale is made, buyer and seller are bound together in an ongoing dialogue. Businesses do business with those that they trust.

Relationships play a more important role in B2B than in B2C decisions. In some cases, business buyers bet their careers on the choices they make. They need to feel confident that their supplier will validate the soundness of their judgment. Smart B2B marketers realize that their job is as much about ensuring the success of the buyer as it is about selling the product.

Service and support are essential decision factors. Business customers won’t wait 20 minutes on hold to speak to a support technician, particularly if their assembly line is down. They expect their problems to be solved when they need them solved.

B2B sales have lots of moving parts. At the high-end in particular, contracts are often custom bid and may include bundled services, special discounts and detailed price schedules.. This process involves extensive communication between the parties and direct contact between different departments of both organizations.

Channel relationships are complicating factors in the marketing equation. B2B marketers constantly struggle to strike a balance between selling to channel partners such as resellers and distributors and selling directly to customers. Channel partners ultimately sign the check for many B2B transactions and see themselves as owning the relationship with the customer. However, customer pull is a significant influence on sales, regardless of the channel. This is a perpetual quandary for many B2B companies, which must market to both constituencies without muddling the message or creating conflict.

Social media are well suited to addressing many of the unique issues noted above. They’re particularly effective at connecting customers with the people behind the products they buy. This barely matters in consumer markets, but in high dollar transactions that may affect the fate of the buying company, the ability to communicate directly with designers, engineers and support personnel can significantly improve buyer comfort. This is why we recommend that B2B companies that undertake social initiatives apply them broadly across the organization. The more you open up your company, the credibility and trust you earn from your prospects and customers.

3 thoughts on “The Changing Rules of B2B Marketing

  1. Pingback: How search and social media will shorten the B2B sales cycle. | The Top Line

  2. Paul, Eric – your first chapter inspired a lot of thought, and I would appreciate the chance to have a conversation offline.

    My (lengthy) comments are below, and you can reach me at ghalliwell@netprospex.com.

    It’s a great starting point. This topic is overdue for all the reasons you mention. That $80bn B2B marketing spend brings enormous clarity to the fact that this is hardly a backwater. I agree with most points, have questions on some and think there some other interesting things going on here that you might also consider.

    I like the story of B2B marketing momentum based around products of greater value which in comparison to B2C certainly have more objectivity. I don’t see this as an either/or though. I think it’s both. Most of us are very turned off by unimaginative marketing hyperbole that talks down to us and rigid corporate websites. B2C does navigation and tone very well, and it’s the B2C model to follow as an evolving set of B2B marketers.
    Many haven’t yet figured out that poking around the edges in navigation bars is not where the user’s attention is, it’s just a reflection of Microsoft’s navigation system. Users prefer information and decisions presented to them in the centered simplicity of the iPhone and iPad (which has almost all but replaced my PC) and the friendly, personable tone of Apple.

    Paradoxically, while your points are convincing that B2B and B2C are different, there are similarities on some planes which I think are worth digging into. In the last 10 years, empires like Salesforce.com have been built on the principal of selling to individual salespeople as a way to storm the beachhead of a large corporation and gain that traditional enterprise sale. Salesforce has shown you can push back some pretty big players like Oracle, SAP and Microsoft, when you back into a market by delivering value to end-user business person who need to get their job done at a price they can afford. Another interesting convergence is that B2C companies are starting to market heavily to B2B. There are lots of retailers out there from clothing to food who use their internet presence to open up scalable markets to corporate buyers. In this sense the two worlds are becoming more fused.

    The fact that over 80% of B2B businesses have a greater corporate social presence than B2C is astounding. Our own mapping of the social networks of over 14 million business executives show that just under 40% of the workforce are members of one or more of the top 10 social networks. There’s a good summary in the Huffington Post that maps the top 50 corporations in this regard:

    Link to Huffington Post article: http://www.huffingtonpost.com/2010/05/18/companies-social-media-st_n_580609.html

    While B2C buyers might be more subjective as you suggest, with social media, B2B marketers cannot dismiss the “merely subjective” any longer as social is all about the inter-subjective of relationships and culture. The hidden issue here is that relationships impact us in ways we can’t control. That’s huge and it’s the unknown that B2B corporations needs to come to grips with. I think you covered this nicely when you point out on the corporate successes like Dell are based on the fact that people want to speak with people, not brands and the trade off will be to accept that to err is human and we will have to accommodate both. I think you are saying that the virtual world is beginning to look very much like the real world…which makes a lot of sense.

    I think the section “To Err is Human” is very strong and a key piece to the puzzle. As you point out with Dell, social can put personality back into the the business equation in a scalable manner and the acceptance that we people make mistakes and these can be forgiven in this trade off is a powerful argument. Its not trivial as I found at a recent conference of social media which I wrote about for iMedia Connection recently.

    Link to iMedia Connection article: http://blogs.imediaconnection.com/blog/2010/06/21/we-can%E2%80%99t-king-canute-the-social-media-tide/

    One point I’d like to disagree with is that buying made by groups means longer cycles. If you look at the software industry, prices have dropped with affordable end-user subscriptions. I agree that more people confer around a decision that may be linked between departments with the purchase of software, but IT is rarely in the mix, and the risk in the initial expense has effectively been removed with end-user pricing and freemiums. The risk is now about opportunity cost. We know there are solutions out there, as you point out we need to understand the value quickly and obfuscation with glitz isn’t helpful. I think we are seeing slightly shorter cycles because in a world that is increasingly plug and play due to cloud computing and platforms. Also, business can’t slow down our decision making processes…the market simply won’t allow it.

    The section on changing channels is really interesting and the rise of search is interesting. One thought here us that mention of email is warranted. B2B direct mail died over the past 10 years not because of social media, but because of email. Email was our first electronic social media, and I think B2B marketers have learned a lot in the past decade, and while push is not relevant across social networks, we have learned to speak to customers in email, by increasingly dialing back the direct sell and providing learning opportunities about the latest tools so business people better understand their options for tools that improve efficiency.

    In regards to the changing rules section, with the Adobe systems example, consider the backdrop of the platform war between Adobe and Apple. Adobe looks like it overplayed its hand in believing Flash was the ubiquitous internet platform. With Apple doing an end-run around this with the iPad, I think publicity, good or bad is about Adobe’s only recourse. Sorry…Mr Brimlow looks like a plant to me. Though that in itself is lesson enough in this new world. I’m not convinced that the guys at Adobe are on their game by any of this.

    I think your premise that the objective (scientific) B2B marketing contrasts starkly against the subjective (emotionally driven) B2C marketing is interesting and has some truth, but doesn’t social mess with that whole equation? The subjective is defined as what the individual might think of something, and has always been easily dismissed. But we can’t underestimate the inter-subjective that is massive in this new social world. When making a decision, only 20% of that decision is based on the information. 80% is based on where the information comes from. That’s why the inter-subjective flips the equation in B2B social marketing and is why the subjective and the inter-subjective and the emotional response to our companies, employees and brands is now really important in B2B.

    I think relationships are more important in B2B purchase because of the value issue you start with at the beginning of the chapter, and these relationships extend beyond co-worker and vendors, they extend across the network of colleagues, bloggers and influencers across the side range of our experience.
    James Burke’s book “Connections” points out that information and influence travel only 3 degrees but that this is measurable and predictable. Understanding the social map of business users is going to be critical to the next steps we take. As Burke point out, it’s not just the nodes in our relationships that are important but as far as creativity is concerned, it’s the nodes that connect into different networks that are the dark matter in this whole equation.
    Again.. would love to chat offline, and I welcome your thoughts and response.

    Cheers,
    Gary Halliwell
    CEO – NetProspex
    ghalliwell@netprospex.com

  3. I think relationships are more important in B2B purchase because of the value issue you start with at the beginning of the chapter, and these relationships extend beyond co-worker and vendors, they extend across the network of colleagues, bloggers and influencers across the side range of our experience.

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