These are the criteria that influence and motivate B2B buying decisions. This extract from an ealier post looks at analysing how products, services and processes create Value in relation to each of the Five Factors.

It is a simple approach, but it produces bottom line results: marketers can deliver fact-based messages that go to the heart of what B2B markets are really buying.

Analysing Value

Begin by choosing a product or service and the way in which it is supplied. Then start a review of your selection in relation to the definitions for each Value Factor – as listed a little way below.

This review should include a performance-ranking of 1 to 5, with 1 being ‘poor’ and 5 being ‘exceptional’. By exceptional, I mean being at least equal to your competitors or better than them.

Here’s an example for the first definition under ‘Response’: if you think you beat the competition in listening to how you affect customer’s success, then you score a 5.  But, you need to support your ranking with a credible statement as to why you should score a 5 – as to why you excel… 

To help get the process started, here’s the type of questions you should perhaps be asking in terms of ‘Response’: 

• How do you identify and then meet your customers’ needs?  
• Who manages your communications with customers and what are the results of this communication? 
• In terms of customer expectations, how do you rate yourselves at fixing problems and delivering the outcomes the customer wants? 
• How does your performance in these areas compare with your competition? 

The Five Factors of Value:

1.  Response

• Continual communication with customers: listen to how you affect their success
• Identify and meet changing customer needs
• Speed of problem solving and solution delivery 

2.  Service

• Accessibility: an open and reassuring organisation
• Clear product information and project status
• Pro-active and innovative 

3.  Time

• Competitive lead times
• Dependable
• Consistent delivery format 

4.  Quality

• Consistent products, services and processes
• Meets the brief or specifications: fit-for-purpose
• Achieves the customer’s operational goal 

5.  Price

• Competitive
• Rational
• Structured 

My suggestion is to begin by involving your sales team in the analysis. Then, once you have built a series of rankings and supporting statements, begin broadening the evaluation process to include opinions from other core functions such as finance, technical, production and distribution. 

It’s an enlightening process and is the first step on building an understanding of how to accurately address B2B’s five buying motivators.

Back to The Long Hello: making B2B marketing work for the bottom line

All marketers understand the need for getting the right messages to the right people. What’s not so straightforward is defining the messages and who should be getting them.

Marketers need to be looking at what their market is buying, because B2B marketing is not about selling, it’s about buying.

An incisive approach to defining relevant and motivating messages is to identify how B2B products, services and processes contribute to customers’ success. As marketers wishing to understand buying motivators, we need to look at what is being bought, how it affects customers’ success, and who is buying it: the What-How-Who of Buying.  

What motivates buying in B2B? Fear?

A lot has been written about how fear is a key buying motivator in B2B – fear of not making the right choices and the subsequent consequences for those involved in the buying decision. The old adage that it’s safe to buy IBM is often trotted out to support the argument that, in B2B, fear is the key. And this is further supported by the idea that minimising fear by minimising risk is a key element in successful B2B marketing.

Surely, this can’t be true in the age of the information superhighway, where customers and user-groups are swapping experiences and opinions on the likes of LinkedIn, Facebook and Twitter? Given all the information that is available about B2B companies and their products and services, I’d agree that confusion may be present in the buying process, but I’m finding it hard to accept that fear is still a factor.

No. Fear does not motivate B2B buying – Value does.

Communicating the Value produced by products, services and processes is a sure-fire way to differentiate a B2B company from its competitors. It’s also a guaranteed way to cut through confusion in a rational way that will motivate the market to listen and to buy. 

In B2B, Value comprises Five Factors: Response, Service, Time, Quality and Price. These are the criteria that influence and motivate B2B buying decisions. In order for marketers to address these criteria – to start ‘talking’ to the motivators – we need to analyse how products, services and processes deliver Value in relation to each of the Factors.

How to start analysing Value

Begin by choosing a product or service and the way in which it is supplied. Then start a review of your selection in terms of the definitions for each Value Factor, as listed a little way below.

This review should include a performance-ranking of 1 to 5, with 1 being ‘poor’ and 5 being ‘exceptional’. By exceptional, I mean being at least equal to your competitors or better than them. 

Here’s an example for ‘Response’: if you think you’re better than the competition in listening to how you affect customer’s success, then you score a 5. 

But: you need to support your ranking with an honest statement as to why you should score a 5… To help get the process started, here’s the type of questions you should perhaps be asking around ‘Response’:

• How do you identify and then meet your customers’ needs?
• Who manages your communications with customers and what are the results of this communication?
• In terms of customer expectations, how do you rate yourselves at fixing problems and delivering the outcomes the customer wants? 
• How does your performance in these areas compare with your competition?

The Five Factors of Value:

1.  Response

• Continual communication with customers: listen to how you affect their success
• Identify and meet changing customer needs
• Speed of problem solving and solution delivery

 2.  Service

• Accessibility: an open and reassuring organisation
• Clear product information and project status
• Pro-active and innovative

 3.  Time

• Competitive lead times
• Dependable
• Consistent delivery format

 4.  Quality

• Consistent products, services and processes
• Meets the brief or specifications: fit-for-purpose
• Achieves the customer’s operational goal

 5.  Price

• Competitive
• Rational
• Structured

My suggestion is to begin by involving senior sales people in the analysis. Then, once you have built a series of rankings and supporting statements, begin broadening the process by canvassing opinions from other core functions such as finance, technical, production and distribution. 

It is a simple approach, but it produces bottom line results: marketers can deliver fact-based messages that go to the heart of what B2B markets are really buying.

It’s also an enlightening process and is the first step on building an understanding of how to produce marketing messages that constantly address B2B’s five buying motivators.

The results will also start to generate guidelines as to the audiences that should be getting these messages.

Read more about Value in B2B marketing:

How Value protects margins      Marketing is not about selling, it’s about buying

Outcomes make the difference      The commercial power of brands in B2B

Back to The Long Hello: making B2B marketing work for the bottom line

In terms of the Five Factors of Value, Price is ranked as the least influential of the five B2B buying motivators. It’s also the component of Value with the most straightforward definitions: Competitive, Rational and Structured.

So why all the fuss, so often, over Price?

Very often, this exclusive focus occurs when customers see nothing beyond Price and Price alone – when they aren’t seeing any contribution from the other four Factors. This doesn’t necessarily mean that contributions are not being made in terms of Response, Service, Time and Quality. More likely, these contributions aren’t being highlighted and accurately demonstrated.

They won’t pay for what they can’t see.

 B2B products and services are typically a complex mix – many pieces go to make up the jigsaw. Often they are surprisingly complex and each piece of the jigsaw should be making a demonstrable contribution to customers’ continued success.

Even the most seemingly straightforward products and services can turn out to be much more involved than they appear at first glance. But all too often, this is where things stop: at first glance.

Roadblocks and deadlocks

By only allowing customers to see a partial reflection of the entire jigsaw, it’s entirely reasonable that they only expect to pay a partial amount of the asking price.

This creates a roadblock for sales and margins and is what often sours and then deadlocks negotiations – options become limited to losing the sale or cutting the price. Hopeless.

Of course there are other ways to handle this like doing the deal and then under-delivering – the Trap-and-Torture method. And it certainly helps to know that this is what less scrupulous competitors might do.

Breaking the communications barrier

B2B marketers need to position their products and services in such a way that the whole jigsaw can be clearly seen and fully appreciated. An earlier post on brands deals with this in more detail, but in summary, it’s vital that all elements of the market see the relevance – to them – of your products and services.

To achieve this, marketers first need to be confident that they have a detailed understanding of the outcomes that are being produced for the market.

The second task is to ensure that outcomes are being convincingly broadcast to the right people via the communications ‘portfolio’: 1-1, PR, events, advertising, direct, digital and collateral.

If Price still remains the customers’ sole focus, then marketers need to analyse why the outcomes produced by their products and services are not considered Competitive, Rational and Structured.

More on Value and buying motivators:

What is Value? - the five buying motivators in B2B

The role of Value in B2B marketing - the influence of ‘Value’ on B2B buying

Leveraging B2B’s buying motivators - developing marketing communications for bottom line results

Back to The Long Hello: making B2B marketing work for the bottom line

1. What are customers buying?
2. How does buying contribute to their success?
3. Who is buying?

These are the must-knows that determine tactics in B2B marketing. Cultivating consistent customers and preventing price pressure – CCC & PPP - provide the strategic direction, but What-How-Who drives implementation.

1. WHAT are customers buying?

Customers are buying outcomes. They are buying outcomes that make a positive contribution to the continued success of their business.

All too often, the marketing focus gets shifted from buying to selling. ‘We sell every variety of nuts and bolts.’

Ok. So, presumably it works like this: There is one gigantic pile of all sorts of nuts, and another huge pile of different bolts. Customers come and get all the nuts they need and then find the matching bolts. Right?

Maybe not. 

In terms of customers ensuring a positive contribution to the continued success of their business, it’s fair to say they are also buying:

• Matched and packaged nuts and bolts
• Adequate stockholding
• Structured discounts
• Nationwide deliveries
• Technical advice and customer training
• Accounting services, credit facilities, stock monitoring
• Warranties

Already it’s clear that they’re buying a lot more than more than just nuts and bolts.

2. HOW does buying contribute to their success?

To answer this question, marketers need to know how their products and services are being used by customers:

‘If these bolts fail, the wings fall off…’ ‘If you don’t have any of these nuts and bolts, we can’t put the wings on. This means we can’t sell the planes…’

Pretty important bolts. Pretty important contribution, too, if they never break, are always in stock, if technicians are expertly trained how to fit and test them, if they are guaranteed to consistently conform to certain specifications, if you can supply them worldwide and track their usage and life-cycle.

Discovering how the contribution is made highlights the Value created within the customer’s business.

Listen up

Listening to customers is the fastest, simplest way to discover this. Meet them, ask them questions about how you are creating Value in their business. A sales team can provide a lot of insight here because they should understand each customer’s business. But marketing needs to develop its own perspective.

Marketing needs this perspective to see the customer in the context of the market.

3. WHO is buying?

The market can exert powerful influences on buying decisions. In B2B, although customers might be buying outcomes, market reflections have to be considered.

The market is not just made up of customers. It may include distributors, overall solution-providers, specialist consultants and support providers. In addition, there may be user-groups, analysts, the media, statutory regulators and industry associations.

Who is buying? The answers to this question are so important because they pinpoint the targets for marketing communications – they provide that all-important focus. Gotta be talking to the right people.

Bringing it all together

Understanding the ‘What’ and the ‘How’ provides crystal clear guidelines for the content and format of these communications.

‘Who’ ensures that marketing is addressing the right audiences within the customer and within the market.

And this means that marketing can maximise the impact of its communications in terms of its two objectives: cultivate consistent customers and prevent price pressure.

Cultivate consistent customers, prevent price pressure – CCC & PPP: the two objectives of B2B marketing

Back to The Long Hello: making B2B marketing work for the bottom line

• To rate something according to its perceived worth, importance, or usefulness
• An amount expressed in money or another medium of exchange that is thought to be a fair exchange for something

In these definitions, two phrases stand out for me: ‘perceived worth’ and ‘thought to be’. So, value is all in the eye of the beholder. Fair enough. But what is being ‘perceived’ or ‘thought to be’?

Value is not intangible. It can be defined and it can be measured.

In the B2B environment, Value has Five Factors: Response, Service, Time, Quality and Price.

These are the individual components that combine to produce Value within products, services and processes.

Simultaneously, they are the five reasons that motivate B2B buying – the real drivers of buying decisions. The Big Five.

The Five Factors of Value

1.    Response

• Continual communication with customers: listen to how you affect their success
• Identify and meet changing customer needs
• Speed of problem solving and solution delivery

2.    Service

• Accessibility: an open and reassuring organisation
• Clear product information and project status
• Pro-active and innovative

3.    Time

• Competitive lead times
• Dependable
• Consistent delivery format

4.    Quality

• Consistent products, services and processes
• Meets the brief or specifications: fit-for-purpose
• Achieves the customer’s operational goal

5.    Price

• Competitive
• Rational
• Structured

Measuring Value Performance

A revealing and rewarding exercise for any B2B company is to examine the performance of their products, services and processes in relation to each of the Big Five.

This exercise is one of the first steps in Value Marketing – a sort of value audit or ‘Value Mining’.

Value Mining is a structured process that delves deeply into individual products, services and processes to identify and measure how they create Value in relation to Response, Service, Time, Quality and Price.

Value Mining is a powerful marketing tool because it defines how Value is being created and it highlights performance in terms of the Big Five buying motivators.

However, it does not fully-define what your customers Value. To find out more about that, you may want to take a look at these posts:

Understanding what your market is buying     

Outcomes make the difference

How Value protects margins    

Leveraging B2B buying motivators

Back to The Long Hello: making B2B marketing work for the bottom line

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:

1. CCC: keep selling to the good customers, keep finding more like them
2. 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

Brands are about relationships. Relationships that are centred around ownership: who owns what and what it is they own. They are a visible mark that tells a story.

With a symbol, a few words and perhaps some music, brands have the ability to create powerful meanings. They can be intensely evocative, conjuring the strongest associations and allegiances. In their most powerful forms, we either love them or loathe them - think of national flags and sporting emblems.

But for a lot of the time, we don’t even notice them.

Weak brands are particularly common in B2B marketing as opposed to consumer marketing. For example, when it comes to cans of baked-beans, there is one brand for me. I’d rather go beanless than break that allegiance.

But is the same true for a company buying a baked-bean canning plant? Perhaps not. Well, why not?

Relationships with brands

As a company selling products or solutions to other companies, what good is a brand? I suppose the broad answer is that a brand can generate such strong associations of trust, satisfaction and fulfilled-expectations that customers simply won’t look at another brand, won’t consider another supplier.

Trust and satisfaction. These are important elements in relationships with customers. So are expectations. Expectations that satisfaction will continue. The trust that buying, owning and using your products will be 100% consistent with past experiences or with proposed deliverables.

Brands mean ownership

We can all recall an example of a piece of advertising that lost its link with the brand: “Great ad! Clever, striking, sharp, funny, hard-hitting. What company was it?” No brand = no ownership.

In B2B marketing, branding is about saying: we own this product.

It may also be about saying: we own its reliability, its short lead-times and its quality. We also own its support, its maintenance and its future up-grading. Most of all, we own the positive contribution it makes to the continued success of our customers’ business. All of these things are ours: this is what we represent.

B2B branding is the work of building associations in the market between a company’s ownership of the brand and ownership of what the brand represents.

These associations of ownership have nothing to do with the brand symbol, its shape, its colours or its slogans. It’s the relationships around ownership.

What is your brand?

What relationship do B2B companies have with their brands?

To answer that question, you might want to think of the brand as a reflection of the company in a mirror. You hold the brand up to this mirror and it reflects everything the company represents. You don’t see the brand staring back at you, you see the company.

When the CEO holds the brand up to this mirror, what do they see? Is the same image reflected back when production, finance, sales, distribution and marketing look in the mirror?

There are probably as many different images in this mirror as there are people looking at it. It becomes such a confusion of various images that it’s meaningless.

No matter what this company is selling, the brand may as well be symbolised by a blue potato eating a camel. 

Market reflections

What a company thinks of its brand is irrelevant in comparison to what the market thinks of the brand. What the market sees reflected by the brand is really all that matters.

Very often in B2B, the market may well include distributors and wholesalers, overall solution-providers, specialist consultancies or professions, and support and service providers - as well as direct customers or end users.

In addition, there may be user-groups, financial analysts, commentators in the media, standards boards and statutory regulators, industry associations and the general public.

Each of these represents a market reflection - the way the brand is seen by the individual components of the market.

Markets become confused and uncertain if the image reflected by the brand is unclear and inconsistent. So people draw their own conclusions. They create their own associations, set their own expectations and decide for themselves how much they trust the brand. Consequence? Ownership of the brand is lost.

This generates perceptions in the market that may have no relation to what the brand actually represents:

‘Oh? I never knew you made those.’

‘I didn’t realise you guys sold all that’

‘What? You mean you can handle this too?

‘I didn’t know you could help us internationally’

‘Oh yes, I know XYZ Inc. They sell those potatoes that eat blue camels. Don’t they?’

Are they talking about us?

More than ever, market reflections - that diversity of associations being made with the brand by the market – are what influences a company’s ability to increase sales, retain customers and protect margins. And this influence is increasing rather than decreasing.

For example, there is growing interest in the significance of social media as a way for people to share their experiences about suppliers and products. And this goes both ways, companies are joining the discussions in order to present their brand-messages.

It’s now probably more important then ever for B2B companies to ensure delivery of an honest, balanced and relevant reflection of their brand to each component of the market.

Be the brand

Brands are not the business of designers and communications agencies. It’s not that designers and agencies produce poor or inappropriate work. Quite the reverse. It’s just that they have no influence over how their clients build and maintain trust and satisfaction, or consistently fulfil their customers’ expectations. That’s not their job.

As B2B companies become more and more visible to their markets, it has to be true that the brand is the company. No matter what your business you are in, your brand is your real business.

In his book Ackoff’s Fables, Russell Ackoff describes a problem-solving process he calls ‘idealized redesign’. Although not specifically related to branding, the process is certainly relevant for a company that wants to ‘Be the Brand’.

“assume that the entity that has the problem was destroyed last night, but everything else remains the same. Redesign that entity so as to eliminate the problem that faces it. The redesign is subject to only two constraints: first it must be technologically feasible, and second, it must obey the same externally imposed constraints (e.g. the laws of the land) to which the current system is subject.

In addition, it should be designed so that it can (1) improve itself by learning from its own experience, (2) adapt to a changing environment, and (3) be improved by being redesigned again in the future.”

Marketers can use Ackoff’s idea of ‘idealized redesign’ to map-out what their brand should look like in the market’s eyes. And they can start the process by asking the (long) question: what are the absolutely essential market reflections the company requires to attract and retain customers and to maintain margins?

The answers should provide a stimulating roadmap for the company’s future development.

More on brands and branding:

Brands build business      Outcomes make the difference      The Long Hello: building brand-relationships

Back to The Long Hello: making B2B marketing work for the bottom line

Price, Quality, Response, Service and Time.

These are the Five Factors of Value. That may not sound very significant, so let me put it another way:

They are the five reasons that make customers buy, the reasons that deals get done. The five buying motivators. The Big Five.

This Big Five are particularly important in the B2B environment, where one company is buying from another company. Where products and services will have much higher prices than in the retail or consumer sector.

Sales cycles will be longer and more complex. There may well be many people involved in the decision to buy. The competition is likely to be actively looking for your deals and challenging you directly: chances are, your competitors are also talking to your customers. And if they’re not, they should be. Just as you should be talking to their customers.

So what are your B2B customers buying from you?

What is going to make customers get the money out of their account and into yours? What really makes them buy? What do they Value?

What is Value?

PQRS&T is just an easy way to remember each of the Big Five. The things that make companies buy things.

What’s more significant is the order of their importance to customers:

1. Response
2. Service
3. Time
4. Quality
5. Price

Some people are surprised to see Price coming last on the list. Surely, Price should be at the top, ranking as the most important of the Big Five? Well, it isn’t.

As an example, think about the relationship between Time and Price. At some point in the timeline of supplying customers, Time becomes more important than Price. In simple terms, you might have the cheapest product, but if you don’t have any stock then you can’t supply. And if you can’t supply, you lose the sale and you lose the customer. Perhaps for ever. Bad for revenue, bad for margins, bad all round.

The importance of Response

In order to develop an understanding of Value, each of the Five Factors has some pretty specific definitions.

For example, Response is defined as:

• Continual communication with customers: listening to how you affect their success
• Identify and meet changing customer needs
• Speed of problem solving and solution delivery

Given the fact that Response is at the top of the Big Five and is therefore ranked as the number one buying-motivator, it’s important to consider your company’s performance in these terms.

How do you identify and then meet your customers’ needs? Who manages your communications with customers and what are the results of this communication? In terms of customer expectations, how do you rate yourselves at fixing problems and delivering the outcomes the customer wants? How does your performance in these areas compare with your competition?

The other important question here is this: Who is responsible for managing and developing Response?

My suggestion is that the answer to the last question should be: the marketing team.

Back to The Long Hello: making B2B marketing work for the bottom line