Is your marketing doing its job? Is it achieving its two objectives?
There are only two objectives in B2B marketing:
Cultivating consistent customers
Preventing price pressure
These are the objectives that should motivate all B2B marketing activities – the two goals that have to be achieved: CCC and PPP.
If your marketing activities are not delivering bottom-line results in terms of CCC and PPP, then two things are probably happening:
- The activities are not marketing activities and should perhaps be handled elsewhere. (Organising the firm’s Christmas party?)
- The activities are not the right activities and should be re-focused or scrapped. (Promoting the wrong message to the wrong people?)
CCC means keeping the customers you want by keeping them loyal. It’s also about attracting new customers and keeping them loyal. Its focus should be on what you are selling and the amount you are selling.
PPP is all about margins. It’s how you communicate – and then deliver – the right Value to the right customers. It’s about being seen as the absolutely right choice of supplier in terms of the Big Five buying motivators: Response, Service, Time, Quality & Price – the Five Factors of Value.
Cultivating consistent customers
I like the word cultivate because it implies caring for something so that it grows and flourishes. That it thrives and does well. It also implies a productive process that takes place over time, something that is continuous.
If any gardeners are reading this, you’ll know that not all your plants like the same things. Same goes for customers. Some plants like a lot of water, others don’t. Some plants can’t take too much shade, some can’t take too much sun.
Equally, in the productive process of cultivating customers it’s necessary to understand that they don’t all Value the same things. Neither do the decision-makers within your customers. For example, an FD may not be too bothered about a product’s ease-of-use or technical functionality, but will rather be concerned with the likes of ROI and payment terms.
Preventing price pressure
Margins are everything because margins mean profit. That’s why PPP is the only other objective in B2B marketing.
For a long time I have been uneasy with the concept of ‘added-value’. We all recognise it as being mainly a B2B term and, to me, it sounds a bit like something for nothing. As if something is being added for free.
We are all used to buying things for ‘free’ – like getting 20% more toothpaste this week for the same money we paid a month ago.
The world of B2B certainly understands pricing structures but I don’t think it routinely expects anything for free. It certainly doesn’t expect items of Value to be added free-of-charge.
Think of a company selling big earth-movers. They do a deal for four machines at an agreed, contracted price. Having done the deal, do they then offer a full-on, five-year maintenance programme for free? Added-value? Certainly not.
So, put a price on it
If something is of Value to a customer, surely it should carry a price? And that price should represent the amount of Value it creates for the customer – the monetary value of the outcomes it delivers.
If a product or service doesn’t create any Value for the customer, if it doesn’t produce outcomes for their business, then, bluntly, it just ain’t worth the money. To them. And also: to them at that particular time.
It does not mean that the product or service is worthless to all customers or will continue being worthless to that particular customer.
In part, this is where segmenting and bundling comes into play – the process of taking products and services apart, breaking them into their component parts and pricing each component. This does offer more flexibility in pricing and margin-maintenance simply because something can be removed if it doesn’t deliver an outcome of Value.
Having gone through the process of identifying how Value is being created by products, services and processes, it may transpire that some components are simply not producing any required outcomes for any customers. This represents an opportunity to cut costs by removing those components that deliver no Value.
Integrating Value
Instead of the term ‘adding-value’ perhaps it’s more relevant to be thinking about ‘integrating Value’.
If a company can arrive at a point where it clearly understands the Value it’s creating - and for whom it’s being created – then activities can be implemented to serve the two objectives of B2B marketing:
- CCC: keep selling to the good customers, keep finding more like them
- PPP: keep your profits up by protecting your margins
Read more on making marketing work:
The What-How-Who of B2B buying - marketing is not about selling, it’s about buying
Leveraging B2B’s buying motivators - results-driven marketing communications
Back to The Long Hello: making B2B marketing work for the bottom line
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