Back2Basics: B2B sales & margins — who really generates yours?
by Mark Eardley. Answer the headline question correctly and you’ll know who influences and makes the business-buying decisions that generate your sales and margins. Knowledge is power.
You’ll know which audiences to engage. You’ll have an opportunity to discover their motivations for supporting a decision to select or reject your offering. You’ll know what you need to say to each of them and how to say it. That’s powerful.
Acquiring it is the first of marketing’s two key contributions to an organisation: providing knowledge on how and why buying decisions are influenced and made. The second key contribution is to ensure the organisation aligns its products and services accordingly.
Know your customer: who, exactly, is the ‘customer’ in B2B?
It’s possible that the most-powerful influence on a B2B buying decision comes from outside the buyer’s organisation.
Here’s a list of five types of outsiders who might feature in a B2B buying decision:
- Trusted advisors: Professional advisors — ranging from management consultants to architects — may have enormous influence as specifiers of products and services recommended to clients. Such advisors are hired to act as the voice of authority and clients tend to heed the advice their paying for.
- Industry analysts: Although perhaps less directly influential, the opinions of industry and product analysts (eg Gartner, Forrester and Ovum in the ICT sector) may be a significant consideration in B2B buying decisions.
- Sector peers: Another particularly powerful source of external influence on buying decisions comes from peers within the purchasers’ industry. Peer-to-peer influence may be hugely compelling when it’s based on positive experiences of your offering. It’s a heavy-weight endorsement when an existing user testifies that you can and will deliver the results you promise. It’s also a potent warning sign if they say you can’t…
- Industry media: Respected commentators in the media across a whole range of B2B sectors (as well as the general media) may be an important voice in the conversations leading to a buying decision.
- Value added resellers (VARs): B2B products are often a small component of a multifaceted, overall product or service purchased by the end-user. If that’s the case with whatever you are providing, then VARs may be the most powerful influencer of all.
So, there’s a set of five potentially deal-swinging influencers that operate outside of an end-user’s organisation. And when you look inside an end-user, the list of decision-influencers just keeps on growing.
Within end-users, anyone who’s affected by your offering is probably going to have a fair bit to say about the pros and cons of buying from you.
Using the simple criteria of who is affected by buying from you, it’s really easy to list these insiders across functions such as finance, business analysis, HR, strategy, IT, production, operations, R&D, sales, customer support, marketing, SHEQ and project management.
Typical B2B sphere of influence
Working with the sphere: the right message for the right people
Having compiled your list of influencers across the sphere, the next step is to define how your offering will produce positive, concrete results specifically for each of them. That requires delivering evidence (known as ‘content’ in marketing-speak) which proves how their particularly responsibilities will be fulfilled and how the success of their organisation will be advanced by buying from you instead of your competitors.
This is straightforward stuff. It’s a simple process of matching benefits to beneficiaries: who gains from the results you deliver and how do they gain?
After listening: act on what the ‘customer’ says
“You listen to the customer. Then you change what you do in response to the lessons learned from listening. There, I just summarised about 85% of the marketing concept. Simple.” —Mark Ritson, Marketing Week
Of course, the simple things you see are all complicated.
The first complication for B2B organisations is that they might not know their sphere’s composition. That means it’s impossible to listen to influencers and discover what they think. If that’s the case, it’ll be a rare coincidence if the organisation secures buying decisions by saying exactly the right things to exactly the right people.
The second complication is that B2B marketers often lack the corporate authority to change what their organisation does and how it does it. That’s hardly surprising. Why should anything change if the perspectives of every element in the sphere can’t be qualified and quantified?
Analysing these perspectives is critical because they will always — yes, always — be based on B2B’s five buying motivators: quality, price, service, time and how well you understand and solve challenges facing your market.
In comparison with the competition, if everyone in the sphere thinks your price is high, your quality low, your service unreliable, your lead-times long and sector knowledge patchy, then it’s time for change. And the people within your organisation responsible for each of those five issues need compelling information as to why change is necessary.
As a marketer, you may change such negativity by providing relevant, credible evidence that justifies a more-positive, -favourable perception throughout the sphere. Evidence that will build sales-creating trust. However, if such perception-altering evidence cannot be provided — because it doesn’t exist — then your offering needs to change so that it is aligned with your sphere’s buying motivators.
Result? Motivators addressed, sales generated, marketing-mission accomplished. Simple.
Mark Eardley advises B2B companies on how to govern their marketing to attract and retain profitable customers; several of his clients have grown to become market leaders. He is the author, together with Charlie Stewart, of Business-to-Business Marketing: A Step-by-Step Guide (Penguin Random House), which offers practical, actionable advice on how to make marketing make money. Mark contributes the monthly “Back2Basics” column, covering how B2B companies and their agencies should manage their marketing, to MarkLives.com.