The marketing strategy of a typical B2B company lets Product Managers, Account Managers etc to converse or deal with potential large clients. Unlike a B2C scenario there are some differences in B2B.
B2C vs B2B
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- In B2B there are fewer customers. So increase in market share has to come from 'share of wallet' of each customer
- In B2B customers are more informed and advanced than B2C.
- In B2B there is no one decision maker. There are many stakeholders. Identify them
- Demands in B2b segment are derived demands of B2C segments. An indicator that India has now 500 million +mobile subscribers indicates mobile telephony and associated business is going to be important in B2B.
- Business buyers have to make more complex decisions. There are lot of things that play in the minds apart from cost and product performance.
- Typical selling cycles are very long.
Thus B2B sales follow a unique pattern
1> Prospect -> initially when a RFP, RFI, POC, Demo, ITB stage is on there is a prospect to add a new customer to the block to buy some product.
This is "Switching Stage".
2> Customer -> When the sales is made ,say for 100,000$ an initial sale may not be significant for the seller or the buyer, but it is an important step.
This is "Switching Stage" to "Satisfaction Stage". Most customers switch at this stage if they are not satisfied.
3> Client -> Multiple repeat purchases makes the customer a client. Generally the next 5-6 purchases depends on the satisfaction levels of the first product. It is very important to manage customer issues at this point. The new sales can be cross sells or up-sells.
This is "Satisfaction to Trust Stage". The client starts believing that the company has the cpability and intent to give good products.
4> Supporter -> After buying over several million $ of products if the customer is still happy he will spread the word, typically to 6 other important sources. An unhappy customer can talk to potentially 15 other sources. It is thus very important to make good cross sells.
This is "trust to commitment stage". The client's trust has to be reinforced each and every time. This will show that the good product and service was not luck but company strategy implementation.
5> Advocate -> An advocate goes beyond spreading the good word of mouth. They actually start working with the company to improve the solution.They start believing in the solution themselves."This is committment to loyalty stage"
Any company at this threshold should be careful not to develop a nexus or fall a victim of anti trust cases. At this stage the strategic views are intertwined.
6> Partner -> They become involved in the marketing and selling decisions of the company.
Thus a customer who becomes a partner is the best possible outcome of customer loyalty relationship.
The above steps merely reflect how the customer relationship grows at each stage and doesn't stop just with customer retention or repeat sales. It is important for the product manager/tme to manage the customer for profit and for relationship in different ways.
The bonding with the customer happens in this way
1> Financial Bonds -> Much of it is done via discounts, bundling, loyalty programs etc. This is a penetration strategy and helps to get an account. This is easily replicated by a new entrant or a rival.
2> Social Bonds -> There are personal relationships to build. Faceless names should be removed and interactions encouraged. Sometimes sales and POCs reach this level where customers feel free to call TMEs/PMs etc to ask for additional stuff, some more changes, some more clarifications etc. This should be encouraged. It means the social bonds between two people are getting created. It is more difficult to break than loyalty points.
3> Customization Bonds -> The social bonds turn the TMEs/PMs and the customers into a learning relationship. Both parties learn and share details intimately. Customers ask for customizations and the seller can become flexible and know what the customer wants, why he wants it and more. This is POC or post sales. Once a customization is done customers feel they are locked in and want more.It goes beyond social bonds and much stronger to break even if the original employees leave.
4> Structural Bonds -> This is much after the sales. Account managers must take care of the customer and their issues. It must be noted that 70% of customers defect due to perceived indifference. Their voices are not heard. So the A/C managers should look into joint investments and shared processes.
Bonding Self questions
1> Whether the request is within the control of the company
2> Whether the request is not within the scope of the company.
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The OLD concepts via the NEW
OLD = Product Marketing ( Brand Management, USP )
THEN = Segment Marketing (Enterprise ,SP )
NEW = Customer Marketing ( customer loyalty ,share of wallet)
There are two approaches
1> A particular set of needs of all customers
2> All the needs for a particular set of customers (Cisco,IBM - solutions)
For any such dealings the costs-benefits of the company can be like this
1> Acquisition -> -ve
2> Base Profit -> Same for all customers every year
3> Revenue Growth -> Increases over the years for each customers
4> Cost Savings -> Increases every year for each customer
5> Referrals -> Increases over lifetime of customer
6> Price Premiums -> achieved with customer loyalty
Note: ABC must be used to gain proper advantage of customer lifetime value
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How does the Process happen ?
IDIC framework -> Identify,differentiate,interact,customize
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Straight Rebuy -> Buyer reordering without any modifications
Modified Rebuy -> Buyer wants to modify product specs,prices,terms of suppliers for next set of materials
New Task -> Buyer buying for first time
Systems buying -> Packaged solution from single supplier ( for turnkey ops)
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Strategy for KAM (Key Account Management)
1> Pre-KAM -> Identify accounts that have potential to become key accounts
2> Early KAM -> Explore opportunitites for the KAM customers.Examine strengths and weaknesses of customers
3> Mid KAM -> Increase in relation with Top management than Sales people.
4> partnership KAM -> Sensitive commercial information is shared. Joint problem resolution becomes the focus
5> Synergistic KAM -> Joint venture in the market.
6> Uncoupling KAM -> End of partnership to prevent a cartel and too much dependency
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