How B2B Product Marketing is Different from B2C

I read a great post from Gopal Shenoy this week about how B2C product marketing is different from B2B. I’m a B2B marketer so that got me thinking about writing a post in the reverse.

Here’s how I think B2B product marketing is different from B2C

1/ Channels are important (sometimes critical) – Most B2C companies sell direct. B2B is often through channels or a mix of channel and direct. The channels can be single or multi-tier and you will need to figure out how to price for these channels, enable and train them, incent them and ensure that there is as little channel conflict as possible. This is not easy.

2/ Long term customer relationships – Many B2C companies talk about “building customer relationships” like it’s a new thing and that’s because for many B2C companies it is (with the exception of SaaS-based B2C services where churn is a major metric). On the B2B side, there are fewer customers and often you will live or die by your long-term relationship with that customer. That means you will often have dedicated teams assigned to larger accounts.

3/ Tiered customer service – Because those long-term relationships are important, customer services becomes absolutely critical. Of course service is important on the B2C side as well, you don’t often see differences in the way you serve customers. On the B2B side there is quite often a massive difference in the way you service a very large account vs. a very small one.

4/ Purchasing teams – For larger-ticket items there will be a number of people and groups involved in a purchase decision including business leaders, IT, purchasing, legal, etc. Closing a deal often means working it across all of these different functions who often have very different requirements.

5/ Users vs. Buyers – This is a big one and in my opinion the reason why so much Enterprise software sucks as far as the user experience goes. Often users have little say the purchase process of enterprise systems. This is particularly true when the sale is IT-driven. As a result, factors such as how well a system integrates with the current IT environment are often much more important purchase drivers than how difficult a product is to use.  Yeah, for some functions users are starting to bring consumer services into the environment without going through IT but that’s still more the exception than the rule today.

6/ Deals are almost always competitive – Most companies have rules around putting projects out for bid if they are larger than a certain size so for big deals you will almost always be in some sort of a bake-off against a competitor. Your ability to stack up against them on a feature by feature basis makes a difference and how well you can roll out and execute a proof of concept will be important too.

7/ Longer sales cycles with distinct stages – Nobody goes online and whips out their credit card to buy a million bucks worth of accounting software (not now anyway). The cycles are long and the sales and marketing support required at each step of the deal is distinct and needs to serve the function of getting the prospect over the hurdle to the next stage of the deal.

8/ Sales Costs are High – Big deals are great when you close them but they don’t close quickly. You are often going to have to invest a ton of time and energy getting a big deal to the final stages including some sort of proof of concept that you may or may not get paid for. If you close the deal, it was all worth it, if you don’t, well, you better hope you are working on more than one deal.

9/ Politics can be a major factor – Anyone who has sold large enterprise deals will have a set of horror stories about how a new CIO came in a replaced a bunch of perfectly good systems with new stuff because “he was an Oracle guy.” CIO’s are risk adverse (they tend to get fired pretty quickly if things don’t work) and they tend to work with the same vendors over and over again. Sometimes they are pals with the vendors or get rewarded by those vendors for being such a loyal customer. There’s a lot of golf being played for a reason.

There are probably 100 other things but you get the idea. Did I miss any big ones? What do you think?

 

 

102 thoughts on “How B2B Product Marketing is Different from B2C”

  1. Awesome article! I’ve lived this world for years. One thing that is worth mentioning is the depth to which you have to go to convince the prospect that you have the right solution/product to meet their needs. There’s a huge need for sales tools that go deep. In B2C a good web site, something on YouTube, a Freemium are all great tools to convince the consumer. In B2B you need a compelling technical demo, a whitepaper or two or three, different pieces of collateral and an army of people to present and explain everything.

    Thanks for the post.

    1. Thanks Peter,
      Sales tools are a huge difference – not only do they have to go deeper, but they have to map to the different stages of the buying process and the different audiences of folks you have on the buying teams. This is radically different from what you have on the B2C side.
      April

  2. Great post, spot on, and your #5 is huge (not that all of your points are valid). I can’t help but think that this is why huge enterprise SW packages are obscure, and difficult to use (I am thinking SAP ERP right now as I type this).

    I know that in my small world, I would love to make my software easier to use, but I have a huge contingent who tells me (customers) that they have trained on the current workflow, and not to mess with it beyond cosmetics.

    Glad to see your posts regularly again!

    Geoff

    1. Hi Geoffrey,
      Thanks for the comment. The whole uses vs. buyers one is a biggie. Eventually I think Saas companies are going to be very successful in getting users to bring their services into enterprises through the back door and the big Enterprise software vendors are going to left flat-footed trying to compete with products that are much more elegant from a user experience perspective. Until then however, it’s hard as a PM in a big organization to convince folks that UI is important when the buyers frequently don’t care all that much.
      And yeah, I had a busy month but I’m back at the blog. Thanks for noticing 🙂
      April

  3. The dreaded buying criteria / feature checklist…

    Customer committees draft lists of features that they might need, collect them into RFPs, and ask each vendor to (somehow) check every box. In the background, each vendor has a uniquely slanted comparison and tries to shape perceived needs in their favor.

    Consider Pentagon procurement as the extreme case: a multi-year exercise in managing RFP scoring mechanisms.

    1. It’s awful isn’t it!?!
      The good news is that there are signs that the procurement process (for enterprise software anyway) is slowly changing. It has to in my opinion if we are ever going to get away from bloated, unusable, utterly frustrating business software.
      April

  4. April,

    Rich touched on the buying criteria/features list but it goes deeper than that. There is usually some compelling business driver behind the buying decision whereas B2C purchases tend be more transient or impulsive in nature. Businesses rarely buy anything because they’re cool or to be the first on the block of because it’s the latest thingy. You won’t find a CIO camping in line for days waiting to buy the first article of a new network switch, router or blade server but consumers will.

    Great article yet again!

    Tj

    1. Thanks Tim,
      Ah you have touched on a subject that I have had many heated discussions about (often over beers at a conference which is where this subject invariably comes up).
      I actually think that B2B buyers are more fashion conscious than you might think, they just have to be very sneaky about it. The example I used to use was Netezza. Once in a while I would do a data center tour with a CIO and they would always (and I’m talking ALWAYS) proudly show me their Netezza box. Why? Because that thing was totally cool looking! It had blue lights all over it (now it’s green swirls but you get the idea)! The other boxes didn’t have lights! The CIO’s would never admit that the look of the thing made a difference but I could tell by the way they talked about it that it did.
      You are very correct that in general IT buyers are really worried about risk. They don’t want to take chances on things that might not work and may ultimately get them fired. I have spent a lot of time emphasizing the “lower your risk” aspects of my B2B solutions. That said, they like to have the jazzy new stuff if you can take the risk thing off the table. However lower risk will always beat fashion in a faceoff.
      April

      1. Fashion conscious is one thing (not a driver) but impulsive is another. Apple can rely on the amplifying buzz that comes from people standing in line to get their next thingy. That’s what helps drive their sales. Folks really want to be the first one on their block/circle of friends to have one.

        While there is often a *very small* segment of business buyers that will buy bleeding edge simply because it’s new, that is not the majority of B2B customers.And they’d still have to justify it somewhere beyond the cool flashing lights. My first sales trainer called things like that “go fasters” – they don’t close the deal but they make the deal go faster.

        Looking forward to arguing this over beers at the next conference.

  5. Great post April! As a Gen Y Marketing Intern at a B2B Tech OEM, I appreciate the info a lot. I would agree the sales cycle is so much longer, and “buying teams” are involved in the purchase instead of individuals. I would love to learn more about how the publishing timely, relevant and valuable content that is easy to share via social media (LinkedIn) can help mitigate the long salescycle and “buying teams” and speed up the process…

    1. Hi Nigel,
      Thanks for the comment.
      The key to content marketing in B2B (in my opinion anyway) is mapping out your sales process and creating content that accomplishes specific goals along that sales process.
      For example in the early stages when a prospect is simply deciding whether or not they should put you on a short list to evaluate, it’s often good to supply them with content that shows the business benefits you can deliver and experience you have with customers that are similar to them (i.e. in their vertical or with the same business problem). The goal is to get them enough information that they decide to take a closer look at you. In the next phase they are usually doing a more in-depth evaluation where they have a checklist of features and functions that you will have to meet. You can make those available or even create things like a pre-built check list to help buyers get past that stage quickly. They might move into a demo stage after that so you could supply a teaser demo online or give them tools that make it really easy to do a demo remotely. You get the idea.
      The key is to remember that the customer is moving along a set of steps toward making a decision and there is different information they need at each step. If you can make it easy to get that information, the steps go faster.
      Good luck!
      April

  6. Great post again, April. These differences impact your outbound marketing messages and themes as well. For example, in our business we spend more time and effort on competitive information and marketing long term relationships and its associated business benefits than is likely in B2C marketing. Moreover, its important for marketing folks moving into the B2B world to realize that not all B2C techniques are effective. For example, a solid web site with good content is mandatory but a glitzy site with bells and whistles isn’t ever going to seal the deal. In B2B you need, for example, to also provide strong support for the direct sales channel competing for those long term deals. Consider new trends such as social media, although important to leverage, it won’t singlehandedly change your fortunes.

    1. Thanks for the comment Bill and I totally agree with you – a B2B website has a much different role in the sales process than a B2C one does.
      For bigger ticket items you are never going to close the deal online. The site and the content on it needs to support different buyers at different stages in the purchase cycle.
      April

  7. Having worked in technology marketing for many years, I agree with all your points, April. An additional point is budgets. In B2C, a person can make an impulse buy and blow their budget, but that is a personal decision. In B2B, budgets are generally set annually, possibly with adjustments quarterly. If there is no budget, the buyer can try to trim within their department, but if not, there is unlikely to be a purchase. In addition, a buyer has signing authority for a certain amount. If you can structure your pricing to fit into the amount for your target buyer, then you are more likely to get a sale. This is why SaaS is so powerful – it becomes an operational (monthly) cost rather than a larger capital (one time) purchase, requiring fewer people to be involved in the decision.

    1. Great point Heather (and I’m amazed I didn’t talk about it).
      Budgets are a huge factor and an impossible one to get around particularly if you sell on-premise software with a regular up-front license. As the SaaS vendors are showing, it’s Operating Expenses are really different from Capital Expenses and often OpEx is a lot more flexible.
      Thanks for the comment!
      April

  8. Great insights, as always, April! I’ve been especially interested in #4 (purchasing teams), as I do a lot of work in the B2B HR space. Companies that sell to HR departments are now having to learn how to appeal to key players in other functions (such as IT and Finance). The folks at HRmarketer are big into this now.

    1. Thanks for the comment!
      Selling to finance is one that often companies completely overlook until they end up on the phone with purchasing trying to convince them not the block the deal. It’s way trickier than it looks.
      April

  9. Right on the money with this one – particularly with the long term customer relationships and long sales cycles.

    It takes a special kind of fortitude and patience to work your way through a cycle where it takes a year or more to close the deal and then a couple more years to actually be recognizing significant revenue from that deal.

    I also fully agree with #4 about working with purchasing teams. One of the greatest skills a marketer can develop is the ability to tune your message to each of the members on the purchasing team in terms of what they value: procurement may be more concerned with cost effectiveness, the engineering team may be concerned with the most advanced technology, and somewhere in there, there is bound to be at least one decision maker who loves the whiz-bang blinky lights.

    Being attuned to who the real decisionmaker is within that buying team can seal the deal. There almost always seems to be one team member who has more influence over the final decision than the rest.

    1. Thanks for the comment Sheri and I totally agree that there’s a black art to figuring out who have the real power in the team of folks making the decision.
      April

  10. @April, black boxes with flashing lights probably do have an advantage of those without. Fascinating psychology, especially as even IT folks, CIOs included, should not be in data centers most of the time to see all that pretty twinkling.

    I think b2b (tech) product marketers have a tough job.

    Not only are they dealing with tech-oriented IT people (even top IT managers have some geek genes in them) but business folks are also taking a very keen interest in budgets and benefits.

    These folks don’t have the time, patience or interest to wade through tech-oriented content material and b2b marketers would do well to remember that.

  11. Great insightful post as always.

    One note however regarding point #1. In the world of B2C, they can be highly dependent on the channel as well, if not more-so. Particularly in the gadget business where without retail, you’d never be able to directly drive the type pf volume required to be profitable.

    But as always YMMV.

    1. Thanks for the comment Jason,
      Yes, that’s very true that there are B2C products that rely on channel as well and some of them can be as complex as the B2B situation where you can have muti-tier channels as well as direct selling to the same customers – the handset business is a great example of this.
      That said, the channel is something you almost always have to deal with in B2B. Direct-only is really only an option where you are selling to very large or very small accounts. Even where you don’t have sales channels you may still be dealing with channels for professional services, support or simple fulfillment.
      April

  12. Two additions others have surely noted: 1) Complexity of the sale, with the need to take into account existing infrastructure, training, corporate culture, deployment and testing time, etc. and 2) long sales cycles, as companies work through and consider all the issues noted in 1). All of which makes the need for informative content that LOOKS AHEAD to the customer’s long-term experience and total cost of ownership all the more important.

  13. “Most B2C companies sell direct. B2B is often through channels or a mix of channel and direct.” Somehow my picture is different. When we talk B2C in software I think about Office and software for taxes…and they are sold through channels & retailers. Whilst large enterprise systems are sold directly in the country where the company is located, and either directly or through partnerships internationally. What is your picture, Bob?

    1. Hi Samantha,
      I didn’t mean to say that all B2C companies sell direct – there are many that don’t and those are good examples. Ditto for large enterprise – in general it’s a mix but some sell only direct. For example I ran marketing for a suite of database products for IBM and we sold mainly direct in but also through OEM, distributors and VAR’s in North America.
      April

  14. Great points. But don’t you think that Enterprise business getting into on-demand model many of the points talked in B2C world are somehow becoming relevant in Enterprise. Rather I can say with on-demand offering from Enterprise companies, the line of demarcation between B2B & B2C is getting thinner like channels,partnering is fading away. Also I was wondering how does Web analytic which is used heavily in B2C world become relevant in B2B rather on-demand Enterprise offering ?

    1. Hi Suresh,
      Very good point! For sure, an on-demand model changes some things in the model but not everything. For example, you will still have an outside sales force for larger deals and you might still need to do custom integration work and development which for larger deployments will usually involve a services partner. When we look at enterprise software for larger businesses, the vast majority of those looking at cloud are doing private cloud deployments. From a purchasing perspective that looks very much like a traditional deployment where you would have channel partners, long sales cycles, etc.
      Then there are other facets that aren’t changing even when you have completely vanilla SaaS deployment – longer sales cycles, multiple purchasing groups, etc. It’s still a large commitment for a company so you aren’t typically going to have a single person buying with a credit card. Someday we will get there – but we are a way off from that yet.
      April

  15. The B2B buyer is more likely to have a split personality.

    If you reach someone on social media (or at a party) and talk to them about something B2C, let’s say running shoes, they can respond to you as themselves. “I hate those shoes because they pinch my feet and the colours are boring!”

    If you then ask them about their enterprise software system, there will be an almost imperceptible moment of silence as they assess whether you’re in their circle of trust. If not, the answer you get will be through their corporate CxO alter-ego. And you have to develop the sense of when this is happening to you.

    This might be a sub-case of your “Politics” bullet, and I think it’s one of the reasons why social media for B2B is easy to get wrong.

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