Unlike B2C customers who in most cases have incredibly impersonal yet passionate affiliations and brand experience relationships, B2B is quite the opposite.
Although there are most certainly markets and products that are commoditised and impersonal – such as cloud-based CRM or accounting software for SME’s which you never speak to a real person, just download & use – more often than not, B2B markets are filled with ‘sophisticated’ market players, who understand their own business and how your solution for their business works.
In addition, the nature of the purchase within B2B is not typically a ‘one-off’ or transactional in nature; it is an ongoing, long-term and mutually beneficial partnership between supplier and buyer. This is due in large part to the B2B consumer seeking to satisfy a ‘pain point’ within their current supply chain to allow their business to become more efficient or effective. If your product, service or solution can fill that void, then you become more than a seller and become a partner to your business.
This ongoing relationship creates a unique set of circumstances for a B2B sales organisation and demonstrates the vast importance of understanding your B2B customers & how to build long-term, mutually beneficial and meaningful partnerships with your clients – not just a one-off transaction.
As consultants to SME’s, we often see situations whereby organisations, especially consultants, offer a profoundly unique service but are focused on one thing – the delivery of that service. Once the initial transaction is complete, they move on – concerned with the revenue flows and leave the customer – although satisfied with their performance – seeking to drive more, new business.
This creates a unique issue, as their business spends more and more money to get new customers, rather than looking to expand their offering and solutions within the customer base they already have, making them more financially committed over longer periods of time…this is the B2B challenge.
So, why is it important to understand your B2B customer?
Understanding your B2B customers is so much more than merely understanding a person, it’s is the knowledge how to build long-term profitable relationships with your organisation.
The most successful B2B companies understand this point offer solutions often through subscriptions that allow their customers to enjoy continued solutions, not to mention upgrades & upsells as they move along. Many great B2B companies offer solutions that grow as their customers grow, effectively being seen as supporting growth and becoming integral ‘business partners’ rather than suppliers.
Long-term partnerships lead to long-term profitability, regular cash flow and the ability to expand your operations. This is embraced particularly well by cloud-based solutions, which start out as a FREE TRIAL or FREEWARE, and as the number of transactions or users increases, so does the subscription costs, this arrangement is seen to ‘support SME growth’ & take advantage of a customer’s cash flow needs.
A great example of this, is Xero, the SME cloud-based accounting software originating in the ‘land of the long white cloud’ or New Zealand and now a global success story – but why?
They got it! The understood how complicated accounting/bookkeeping could be for SME’s and start-ups as they moved to expand their businesses from a single owner/operator to an SME and in some cases large multi-site operations. Xero cleverly created easy to use software not only for their buyers (SMEs & start-ups) but the key influencers, being the accountants.
Xero crafted easy ‘back end’ access for accountants & bookkeepers to reconcile payments, complete annual tax and quarterly BAS, you name it.
Thanks to Xero and other systems that have popped up in its wake, all of a sudden, what was traditionally a ‘boring & necessary’ system or process, became sexy when integrated with CRM systems and other ERP systems within SME’s operations – not to mention keeping your accountant happy, which is always a good thing.
Who is involved is just as important!
As we showed with the Xero example, B2B customers are influenced by so much more than an advertisement in a trade publication!
The Buyer – Although being the person who signs the cheque, the buyer is influenced by so much more in today’s fast past B2B world.
It is vital you learn to understand your buyer holistically. Focus on buyers’ motivations, their pain points and what personal & corporate goals they have, so you can align your needs with theirs.
As with Xero, this innovative accounting and bookkeeping system understood that most people are not accountants and want things to be easy, cloud-based and look nice – so they created a ‘client facing’ platform which removed the accounting jargon and created a user experience that almost anyone can enjoy.
The Influencer – this can be someone internal or external to the organisation or its supply chain, in many instances, they may not even know the influencers, but follow them on social media! With over 60% of most B2B transactions being influenced by someone else that a B2B buyer trusts, it is important that your buyer networks are infiltrated before you even set foot in their office.
The Users – Having a user who ‘hates’ your product, service or platform can create a real headache for a B2B buyer. For example, if you provide an ingredient to the baking industry, which adds complexity to the baking process but creates better flavour – you are in trouble. This is because your users, the day-to-day operators of your offering, will rise within their organisation, complain and create noise about the ‘unsuitability’ within the supply chain, the additional time it takes, thus incurring more costs…the rest, as they say, is history. It’s important to be up to date and focused on the user experience at every step of the R&D and sales process… failure to do this is at your peril.
The Change Agent – this is a secret weapon – and will be discussed at great length in our next article – however these are people either internal or external to the organisation that sustain the organization’s current performance and assure its longevity.
Where some people see this area as simply someone who is an expert in ‘changing the status quo’, as we will discuss in our next article, these highly skilled and valued individuals ensure that people are ready, willing & able to manage change within themselves, their role and an organisation as a whole.
So, how can all this help you better understand your B2B customers?
Anyone who says they don’t have access to the relevant B2B tools is kidding themselves. There are a range of surveys and social listening tools which are great for understanding user needs not buyer needs, set up as regular ‘continuous improvement’ mechanisms within your organisation can assist your business to LISTEN, INNOVATE & GROW.
Through understanding your customers ‘pain points,’ there is a high likelihood that you will see an opportunity for ‘line extensions’ or iterations in your business model to provide significant growth or new business opportunities. Look at WD40 for example, it was created to “protect the outside of the Atlas missile from rust and corrosion”, think about that next time you a spraying it on a squeaky door hinge!
There are a range of paradigms for better understanding the needs of decision makers (influencers and change agents) which enable you to get a detailed understanding of the broader and strategic requirements of your customers thereby allowing you to determine how to tailor (or possibly create new solutions to meet their needs. These can include:
- Structured feedback sessions with decision makers
- Customer advisory panels
- Conducting cross-functional workshops with your customers
To truly understand your B2B customer, you need to understand what motivates them & their company, how you can integrate your solution into their business model with the minimal amount of disruption. Focus on setting up a long-term & meaningful partnership all the while ensuring to innovate and create new revenue opportunities not only for you but also for them.
Without your clients, you wouldn’t be where you are today – or where your vision sees you being – so look after them.
For regular insights, trends and approaches to help you win in B2B markets, sign up today to Listen Innovate Grow – the blog for owners and managers of start-ups and SMEs looking to grow & thrive within B2B markets.