This is part 1 of a two part series. To read the second part, click here.
What is B2B Marketing?
At its simplest, B2B marketing refers to the marketing of products or services to other businesses. B2B marketing is relevant to a spectrum of products and services – ranging from SaaS, security and enterprise solutions to even office supplies like paperclips or printer ink.
What makes B2B landscape unique?
The fundamental difference between selling B2B vs. B2C products of course emerges from the difference in consumer profile. While B2C firms need to build a brand for individual consumers and households- whose purchase behaviour is often driven by emotions, B2B marketing entails pitching a brand to purchase teams and firms, whose consumption pattern as well as buying behaviour is relatively more process driven.
This brings in some unique nuances in the B2B landscape. Appreciating these can help to define brand building tenets for B2B firms:
Complexity of Consumer Profile : B2B decision making units are usually cross functional teams. These teams may consist of several members who at times even carry competing priorities depending on their individual incentive (e.g., optimizing on cost vs. lead time vs. performance).
Therefore, the target audiences for B2B marketing are amorphous, made up of groups of constantly changing individuals with different interests and motivations.
A rational decision-making process : B2C purchases are made on a basis of both “needs” and “desires”. It is perfectly understandable if consumers buy even a high-ticket size product driven by an impulse, craving, FOMO or on a whim. Such emotions are rare in B2B space.
B2B purchase decisions are more logic driven and run on the principle of risk minimization. Even behemoth B2B clients run on a strict budget with little scope for ‘indulgence’.
Inevitable service expectation : The B2B product/services are often tailored to client-specific needs and hence B2B marketing efforts need to focus much more heavily on pre-sales, onboarding and post purchase customer service as compared to B2C marketing.
Not only is service a big source of confidence, it also helps B2B sellers nurture client relationships and ensure that they remain in consideration for upcoming client requirements.
High reliance on close community Word of Mouth : The world of B2B purchase decision makers is rather small and closely connected. In fact, it is not uncommon to find communities/forums where B2B purchasers for specific categories share their experiences and feedback.
Couple this with high-ticket, longer-term purchases, and you get a scenario where word of mouth plays a much bigger role in purchase decision making. Social proof signalling by virtue of showcasing existing big and relevant client testimonials and references is a strong way to dispel uncertainty and bridge the trust deficit in B2B marketing.
The close community nature of B2B marketing is also a safety valve for both marketers and customers, since it works both ways. Difficult customers who delay or block payments, and make unreasonable demands, will soon find themselves being shut out of the ecosystem of good vendors, just as vendors who provide shoddy products or service will soon find themselves out of customers.
High loyalty potential co-exists with a constant eye out for better choices : Given the longer lead times, higher costs, complex search and on-boarding process, if a player is delivering on quality, cost and service, stickiness is generally high.
Hence, B2B marketers focus a lot on retaining existing clients. This also opens up the possibility of developing customized products and solutions for evolving needs of clients that can create newer revenue streams.
Having said that, it is also important to remember that B2B marketers cannot rest on their laurels because clients inevitably carry 2-3 firms in their consideration set to ensure competitive pricing or explore new technologies/offerings. So, even though clients may carry a positive bias accruing from past experience, repeats cannot be taken for granted.
Smaller universe, tangible segment markers but high competition skew :The overall universe available for B2B marketing is often just a fraction of that of B2C marketing.
B2B landscape offers more tangible markers (e.g. number of employees, revenue of the firm etc.) to segment the market. This means it is relatively easier to segment the B2B universe and find the right segment to zoom into. What this also means that there would be a higher competitive clutter because multiple firms would be eyeing the same valuable client segments.
Even within the client base, the pareto principle is quite salient in B2B scenario (i.e., fewer clients contribute to a significant proportion of revenue). This means that B2B firms need to have a well-defined internal client segmentation based on their current and future business potential. This would also determine the service levels delivered to clients.
Though the world of B2B Marketing has its nuances, it is in no way low on dynamism. In fact, just as the world of B2C marketing is seeing an evolution of its playbook, B2B marketing playbook is also evolving.
Some of these changes are happening because the notion of work and workplaces itself is changing, thanks to the emergence of a newer, younger workforce and an explosion of startups. Further, the pandemic led disruption has also had an impact on B2B marketing landscape.
In our next edition we will look at some of these trends and also discuss a framework summarizing the key tenets of brand building in the B2B space.
Meanwhile, if you have seen or heard of any interesting examples of B2B marketing, share with us. Keep the discussion flowing at email@example.com. We read all your emails.