Recent research into the current focus of B2B marketers has pointed to two interesting trends guiding much of their activity around building their B2B brands: (1) moving from a price-driven focus to a value-based approach and by (2) placing more emphasis on the customer experience. Although these highlighted areas of focus were reported as unique separate initiatives, the concept of enhancing value and improving the customer experience are strongly linked and can be considered holistically.
Brand Positioning: The Move to Value
Historically, many B2B companies believed that branding was a B2C marketing imperative, and had limited value in B2B markets. Why?
- Purchasing in the B2B world is more of a rational price decision, and emotions play a limited role in the purchase decision;
- The customer base was often defined and narrow, so there was no need to spend money on branding;
- The direct sales representative owns the brand…face to-face interactions deliver the brand message;
- The sales channel was often too complex so traditional branding methods became less effective,
It’s time to acknowledge the new dynamics of B2B sales. According to a recent McKinsey study, ”Decision-making authority for purchases is slipping away from individuals in familiar roles—often those with whom B2B sales teams have long-standing relationships. Business-to-business selling has become less linear as customers research, evaluate, select, and share experiences about products. As a result, their behavior has become more consumer-like.” Businesses today are often looking for partners, not just vendors, as they attempt to improve and position their own brands. In today’s environment of rapid information flow and internet search, all participants in the value chain (customers, special interest groups, suppliers, consumers, etc.) are getting involved in the purchasing decision. Today’s purchasing decisions are increasing in complexity, often incorporating social positions and corporate culture (i.e. sustainability record, innovation history, raw material sourcing, labor practices, etc.) of potential partners into the evaluation process. So B2B suppliers are having to think more about brand image, and are taking a more holistic approach in creating and conveying their brand.
Customer Experience: The Basis for Defining Value
There are two primary challenges in improving brand image by delivering increased value. First, is to understand what drives value…not only within the purchasing group but to all of the functional areas within the customer. As an example, procurement value drivers may be price, terms and accurate billing; while operations’ value drivers may be run-ability and on-time-delivery. Understanding the underlying value drivers for each functional area is foundational in any brand enhancement strategy designed around improving the customer experience.
The second challenge is to understand the different value profiles by customer segment because all customers are not created equally. As an example, customers that are price leaders often have a much different value profile than value leaders, as their customer demands are very different. Segmentation of your customer base is a valuable exercise when creating an overarching B2B brand strategy.
Successful B2B companies view the entire customer experience as an opportunity to improve brand image and are seeing positive results from their efforts. Quality B2B brands adapt their brand positioning to continue growing the business by listening to, interacting with, and understanding all functional areas within their customer base. PMG’s Customer Insight provides the information needed to understand all of the value drivers for the critical functional areas within your customer base. This will serve as the foundation for building a value-based B2B brand by enhancing the entire customer experience.