“B2B marketing is just marketing to consumers who happen
to have a corporation to pay for what they buy.”
So why is this statement wrong?
One of the most noticeable trends in the marketing world is the tendency for marketers to follow the latest money spinner like a flock of well informed sheep. This may sound obvious, as there is no other way of paying the bills, but recently, the rhetoric from some consumer marketers has started to change, to justify why they are just a capable of delivering b2b marketing, because it is really just the same thing as b2c – same audience, same decision making process, this can be quite misleading. Let’s face it, at the moment, consumers are pretty pushed for spending money – and this is also the money that greases the wheels of b2c marketing, whether it is advertising washing powder on the Tube, sponsoring Curly’s hat in Corrie (we obviously aren’t in that demographic, as you can tell) or piling on the adwords.
Stark choices are happening right now and in general consumer spending is pretty suppressed. Agency, advertising and consultancy fees are dropping like a stone in b2c, so what’s the solution for some b2c marketers? Learn how to do b2b marketing and why it differs from b2c marketing? No, it is easier than that, just redefine b2b marketing as being the same as b2c! In contrast to b2c, the b2b space is fairly buoyant, at least in our recent experience – so what are the reasons for why this may be the case. Here are some possible reasons to help you make your mind up, if you care: –
1. Decision making processes are completely different.
A consumer wants new insurance, so they go online, use a comparison site, get some quotes, make some phone calls and then transact. 1 hour later – new insurance. Sound familiar? Not for everyone, I’m sure but that’s how lots of us do it and so do our friends.
A small company wants to purchase new insurance. Either, the decision maker, her PA, his son, someone else or all of the above, perform an initial information gathering process. Are there any specialists in our vertical sector? Can we purchase a product online? Lets call a local broker and get them to find some quotes. (In contrast to the b2c insurance market, b2b seems heavily broker led and not significantly online yet.) Do you know of a large online b2b insurance broker? Thought not. I asked around the office and we couldn’t either.
Next step: Compare quotes, compare aspects of the policies, discuss at board meeting? This all takes time and time also means an opportunity for suppliers to communicate their offer and their company before a decision is made. Finally, get a couple of signatures from the relevant decision maker and off we go. Deal done for another year.
2. Regulation and Legislation
Consumers are not really regulated much, if at all. If John Smith decides not to renew his home insurance, its his loss (literally) if something goes wrong. John has no real responsibility to anyone for ensuring that things are done properly, other than his wife, when someone runs off with her prized bonsai wisteria. If John fails to feed his dog for example, he is not liable to lose his ‘Investor in Pets’ award. If he doesn’t mend his bike, the British Standards Institute wont be knocking on his door any day soon to remove his BMA007 (Bike Mending Accreditation – 007).
Unlike John, businesses have a responsibility to their employees, the public, their investors, their shareholders and their customers and suppliers. In some cases, these are also legal obligations and therefore these also drive purchasing behaviour, meaning a decision is not a simple yes or no process.
3. Companies have to spend, even in recession.
My home computer is a Pentium 4, not dual core, 100gb hard drive. But guess what – it runs the internets, I can write documents, (it spell cheques them too, before I sned them) and it plays my music. I’ll change it next year when I have some more money. Maybe even the year after if this recession lasts a bit longer. Heck, Windows 7 may even be established and running smoothly by 2011/12 too, so I might hang on till then.
In business, continuous and heavier use of equipment and the higher incidence of leasing in companies, means regular replacement cycles. Yes companies can extend these, but eventually it will start to affect the running of the business, it will impact profitability and therefore it could end up costing as much to not spend as to buy new stuff. Companies also have to update their technology to compete or face being extincted by newer competitors – an example of this could be high street retail vs online shopping.
4. Most businesses are fairly small.
Most companies in the UK have less than 10 employees – 92% is a widely accepted number and this does not include the many small businesses who remain undetected. In many cases these businesses are also owner managed and so the ‘Corporation’ paying the bill is actually the owners pocket. Contrary to the belief of many, during recessions, the management are not just signing blank cheques for their ‘consumer’ employees to purchase new products. Everything is getting signed off and scrutinised, regardless of value, in many companies. Now this scrutiny is even happening in the public sector…
5. A company may have spending power, relative to more people and its own customers.
An individual consumer usually has only individual purchasing power – one computer (maybe two), one television (maybe two, if you are an MP), one printer, one swimming pool, one moat to repair and so on. If you push marketing spend at an audience of individuals, unless mass adoption and word of mouth occurs, this intrinsically limits the return on investment from any marketing activity to multiples of one product purchased and then the repeat spend from future individual purchases.
In contrast, a company will probably be purchasing on behalf of 2 or more people at some point and also separately purchasing for the company itself. In the context of IT requirements in a small business, this may mean a notebook, a desktop, complete with peripherals, software, support and so on for the employees and then in addition, a server, a CRM system, a NAS and other required kit for the company. This can be a significant spend. In a larger business, or an online business, the IT spend can be massively greater than the number of people within the business. Look at Twitter, Facebook or Amazon for example – few people, large IT spend.
If we look at vehicles as an alternative example, a consumer might change car once every three years, whereas in a business with three cars, on a regular replacement cycle, this might one new car per year and therefore the communication strategy changes accordingly.
Why decision making is different.
What we are saying here is that for a variety of reasons, only a few of which we have even touched on, b2b marketing is very different to b2c and always will be as the entities are very different and the decision making processes are more complex. Obviously at the end of every decision making tree, are people. But to therefore assume that they must be acting as a consumer in their decision making and information gathering processes, (what we are all effectively marketing into as businesses), is a trip down a marketing and return on investment cul-de-sac.
It is obvious that many marketers are finding that there is less money out there in b2c world, but for some to try to redefine b2b marketing as the same thing stupid, could produce some costly boondoggles and therefore our recommendation would always be to use a b2b specialist, if one exists in your area and you are comfortable with their approach. We aren’t dismissing b2c marketing and as you can see, we also embrace many consumer approaches to complement our many years of experience in b2b marketing, but its crazy to redefine b2b marketing as b2c marketing 2.0.
Let us know what you think about b2b and b2c marketing in the comments below.