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10 Hurdles to Successful B2B Marketing Strategies

When B2B International first started in the 1990s, one of the biggest challenges we had was communicating to potential customers how our talents as B2B market analysts and marketers were distinctive. There was a widespread denial that business-to-business marketing – and the methodologies employed to investigate these markets – were unique from consumer marketing in any way.

B2B Marketing - What Is It?

As always, we must be specific in our definitions. The B2B market and B2B marketing are the same thing. To answer these questions, think about the value chain that begins with a customer demand and ends with dozens of corporate products or services that are needed as a result. Take, for example, the ordinary shirts that we purchase. There is no chance that they've ended up in a store by mistake. There is a huge value chain that starts with cotton or some other fiber and must then be woven into cloth, which is then machined into a garment, boxed, and circulated via many levels until we ultimately take it up from the shelf.

B2B Markets Have A More Complicated Decision-Making Unit

Even the most complicated decisions are made by the small family unit in most homes, whereas everyday necessities like clothing, food, and cigarettes are frequently handled by a single individual. It's possible that the decision-making unit (DMU) in business-to-business markets is extremely sophisticated.

Products with a small value and a minimal risk of failure (such as the ubiquitous paper clip) may be ordered by the junior staff member. The procurement of a new plant, on the other hand, may include a huge group of people who deliberate for a long time before coming to a decision. People enter and leave the DMU on a more frequent basis than they change family units to make their various contributions. People also leave the firm or change employment significantly more frequently than they do in the DMU at any given moment.

This dynamism and complexity has ramifications for business-to-business markets. B2B communications have a nebulous target audience made up of individuals who change constantly and have a wide range of interests and motives. Buyers are on the lookout for a good offer. High throughput is what production managers desire. Executives in charge of health and safety would like a low level of risk. And they are only their most basic requirements. Each participant in the DMU will also bring their own psychological and cultural baggage to the table, resulting in interesting differences in the selection of items and suppliers.

There are a variety of purchase behaviors and levels of complexity associated with each of these subcategories.

  • Low-risk, low-value transactions differ the least from those made by consumers. They generally include only one individual, usually a junior member of the staff. Making the erroneous option carries no financial or business risk, therefore the decision is made quickly and without much consideration.
  • Purchasing low-risk but high-value commodities like raw materials often involves a combination of technical and purchasing staff, along with board members and other executives. This level of complexity is required in order to keep costs down without compromising quality. On a transaction-by-transaction basis, purchasing personnel would typically be the major decision-makers, guided by more technical employees who would examine suppliers on a regular basis.
  • Office insurance, for example, is a low-value, high-risk item that involves both specialists and customers. A specialist (in this scenario, possibly an in-house legal expert) would tend to be the major decision maker every time a purchase is made because the 'risk' is associated with the product and not with the price.
  • Many senior decision makers evaluate various buying criteria when making high-value, high-risk purchases that are distinct from those made by ordinary consumers. When it comes to plant equipment, we may expect the involvement of a CFO, R&D Director, Production Director, Purchasing Director, Head of Legal Department, CEO, and a number of other upper-management department heads.

B2B Buyers Are More "Cautious"

B2B Buyers Are More "Cautious"
B2B Buyers Are More "Cautious"

It's debatable if business-to-business purchasers are more 'rational' than their consumer counterparts, but we think this to be the case. The majority of us keep our emotions on a leash when we go to work so that they aren't visible to our coworkers.

Won't someone pay more for a leather jacket that is less warm and more durable for $200 in the store next door, but it costs $3,000? People who spend $1,000 on a season ticket to a recently relegated football team, or $6.50 on a packet of cigarettes that keep them out of public places and put them at risk of serious disease, are they the same people who choose to buy a computer that frustrates them or an asbestos roof that puts their health and the health of their colleagues at risk?

When it comes to consumers, the truth is that we are less knowledgeable, less responsible, and more prone to excesses, recklessness, and self-promotion than we are in the job. As a result, we are more likely to make purchases that a business-to-business buyer (who must make a profit every month) would consider absurd. As customers, we're considerably less likely to inquire about the ROI of a product before we buy it (return on investment). We only purchase what we really desire.

Business-to-business buyers' rationality helps B2B marketers' jobs in part; all we need to do is design and manufacture superior items and provide them on time and at a reasonable price.

Not exactly. There is no truth in the assumption that B2B buyers are completely unbiased. Because most B2B purchasers are bound by accountability, trust and security are major concerns. Buying an unreliable product and service is too risky for any B2B customer. Trust and security become vital because of this. Emotional issues are crucial. As a result, brands, reputation, case studies, and other elements that represent dependability and consistency across the course of a product or service's existence are given significant weight.

B2B Products Are Frequently Difficult To Use

B2B Products Are Frequently Difficult to Use
B2B Products Are Frequently Difficult to Use

B2B products, like the decision-making unit, are frequently sophisticated.

Consumer product purchases require little skill (maybe just a whim), whereas industrial product purchases often necessitate the use of a qualified specialist. Industrial items, in contrast to consumer goods, are generally customized and require a great deal of fine-tuning. Even relatively complicated consumer goods are frequently chosen based on a limited set of criteria. Some people choose their vehicle based on how quick and attractive they think it is, while others buy a music system because it is blaringly loud.

In contrast, even the simplest industrial items often have to be incorporated into larger systems and therefore have extremely particular requirements and need to be intimately, expertly examined and modified.. It's hard to envision a turbine maker or a business website design buyer looking at three or four goods and then choosing one just because it looks great. The choice of turbine will involve a wide range of technical, productivity and safety considerations, while the choice of website may be dependent on its integration into a wider B2B marketing strategy, its interaction with users and the extent to which it attracts potential customers via search engines.

When it comes to consumer products, buyers aren't concerned with the finer technical nuances. The great majority of car buyers are significantly more concerned with the car's top speed than its acceleration. As an example, the buyer of a chocolate bar is more concerned with whether the product keeps them from being hungry and tastes good than with the process and ingredients that go into making it. As a result, consumer goods are typically marketed in a superficial or even hollow manner.

B2B Markets Have A Small Number Of Buyers

B2B Markets Have a Small Number of Buyers
B2B Markets Have a Small Number of Buyers

Almost all B2B markets have a customer distribution that confirms the Pareto Principle or 80:20 rule. Few clients account for the majority of sales. Also, we're not talking about tens of thousands or even hundreds of millions of people. Having fewer than 100 customers who are important to sales is not uncommon, even in the largest B2B enterprises.

There's also the issue of proportion. In consumer markets, the amount of a product that a single person can purchase and use is reasonable. The distinction between the light and heavy users is a matter of degree when contrasted to the size of disparities in business-to-business markets, but there are certainly heavy users of all consumer products. Most consumer product buyers fall into the category of "typical spend per month," with a few heavy spenders and a few light spenders at the extremes.

The difference in spending between the biggest and smallest purchasers in a business-to-business market is likely to be substantially bigger than the difference in spending between big and little consumers in consumer marketplaces. It is important to note that the presence of a few key accounts in business-to-business marketplaces distinguishes them from consumer markets and necessitates a different marketing strategy.

There Are Less Behavioral And Needs-Based Segments In B2B Markets

More than 2,000 business-to-business research have shown that B2B markets contain much fewer behavioral or needs-based categories than the consumer markets. While an FMCG market may have as many as 10, 12, or even 15 categories, a business-to-business research is more likely to create 3 or 4.

Business-to-business marketplaces have a smaller intended audience, which contributes to this. Despite the fact that there are only little behavioral or need differences across segments in a consumer market with tens of thousands of prospective customers, it is nevertheless practicable and cost-effective to segment it into 10 or 12 distinct groups. Obviously, this is not the case when the intended audience comprises only a few hundred corporate clients.

For the most part, this is because the requirements and behavior of businesses differ less than those of consumers (who are more emotional). When buying for a business rather than for oneself or a close family member, whims, insecurities, pleasures, and so on are significantly less likely to enter the buyer's mind. Many of the extreme behaviors that could otherwise show if the decision were left to one person with no accountability to others are filtered out by the involvement of multiple colleagues in a B2B purchasing decision, as well as the workplace standards developed over time.

The behavioral and needs-based segments that arise in B2B markets are frequently comparable across different industries, as may be observed. In a typical business-to-business market, needs-based segmentation look something like this:

  • It's a low-margin market group that's only interested in the bare essentials. Typically, companies in this market segment are small, have minimal profit margins, and place little value on the product or service at issue.
  • A quality- and brand-conscious market segment that seeks and is willing to pay for the greatest possible product. Companies in this market category are often large or medium-sized, and they place a high value on the product or service they provide.
  • A service-oriented market segment with high standards for product quality and range, as well as after-sales, delivery, and other aspects. These businesses are often tiny, medium-sized, or even huge, and they engage in time-sensitive industries. They frequently buy in bulk.
  • An account segment that places an emphasis on partnerships and values trust and reliability, and views the supplier as a valuable strategic partner. These businesses are usually huge, have significant profit margins, and see the product or service they're selling as critical to their long-term success.

Personal Relationships Are More Important In B2B Markets

Business-to-business markets are characterized by the significance of human relationships. It's much easier to talk to a small number of frequent customers who buy from the business-to-business provider. Customers are visited by sales and technical reps. Everybody knows each other by name. Personal connections and mutual trust grow over time. Customers that have been loyal and committed to a business-to-business supplier for a long time are not uncommon.

Personal relationships are especially important in emerging markets like China and Russia, where there is little culture of free information, historical quality problems with local suppliers, and – in markets where the concept of branding is still emerging – little other than trust in the salesperson on which they can judge the provenance of the product or service they are buying.

B2B Buyers Are Longer-Term Buyers

It's true that people acquire long-term investments like houses and cars, but this is an exception. Long-term purchases, or at least purchases that are intended to be repeated over a long period of time, are more typical in business-to-business marketplaces, where capital machines, components, and continuously consumed consumables are prevalent.

Furthermore, in business markets, long-term products and services are more likely to necessitate service support from the supplier than in consumer markets. A computer network, a new piece of machinery, a photocopier, or a fleet of automobiles frequently require significantly more comprehensive after-sales servicing than a home or a single vehicle purchased by a customer. It is unlikely that repeat purchases by businesses (such machine parts or office supplies) will be supported by customer demand for ongoing knowledge and services such as delivery, implementation/installation advice and other such things.

B2B Markets Drive Innovation At A Lower Rate Than Consumer Markets

Figure 1 shows the resulting demand diagram, which shows that consumer markets drive the majority of innovation. B2B companies that innovate frequently do so in response to an invention that has previously occurred upstream. B2C companies, on the other hand, are less risk-averse since they must anticipate and react to the whims and irrational behavior of customers rather than the more studied decisions of enterprises. B2B enterprises, on the other hand, have the luxury of reacting to trends rather than trying to foresee or even initiate them.

To be clear, this does not mean that companies in B2B markets are less innovative than those in consumer sectors. In fact, the contrary is often true, since innovations are frequently better planned and sold in the B2B industry, where target audiences are more defined and trends are easier to identify.

Consumer Markets Rely Far More On Packaging

The packaging of consumer goods has grown enormously in recent years, as marketers attempt not only to protect and preserve their products but also to use the packaging as a vehicle for the transmission of hopes and wishes to the buyer. Because consumers are less rational than business-to-business customers, this strategy has had tremendous effectiveness in increasing the perceived worth of products.

In business-to-business markets, where products are judged primarily on technical criteria and the extended offer is built around relationships rather than dreams, aspirations, or appearances, adding value through packaging – making packaging a key part of the extended offer – is much more difficult to achieve.

Business-to-business marketers should pay attention to this since packaging, like product, has a functional purpose. Relationships and knowledge may be developed much more effectively with the use of resources.

In B2B Markets, Sub-Brands Have Less Impact

The development of a powerful brand is, in our opinion, the most overlooked B2B marketing opportunity. In a world where it's getting harder and harder to tell one product from another, having the backing of a strong brand is even more critical.

When it comes to B2B purchasing decisions, the importance of brand is thought to have risen over the last decade (as compared to consumer buying decisions, where it used to be only 5 percent of the decision) and B2B companies have ample opportunity to differentiate themselves through effective branding strategies.

However, B2B organizations are, on average, significantly weaker at designing and implementing branding strategies than B2C firms. B2B organizations are notoriously lousy at recognizing that a branding strategy should encompass all customer touchpoints and aspects of the business; a poorly-trained technical sales force can quickly destroy the results of a branding communications effort.

Conclusion

The most important thing is to avoid becoming complacent or standing stagnant. Your company must continually evaluate and enhance its B2B marketing tactics in order to be competitive.

The world of internet marketing is changing at a rapid pace, but today, companies who successfully collect and use data about their performance – across a wide range of marketing endeavors – are in a position to win.

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