Thursday, August 11, 2011

B2C vs. B2B Marketing: Kirk vs. Spock

You would think that there really wouldn't be any difference between selling to an individual and selling to a company because either way, you're still marketing to a person, but there is a difference and it's a big one. Individual consumers tend to buy based on emotion whereas consumers buying for companies tend to buy based on logic. Yes, families consult on big-ticket items like cars and houses, but what drives the initial review of the purchase? "I like this car," or "Wow, isn't this house great!?" Sure there are considerations like having enough seating or bedrooms, but the considerations of a personal purchase are much different from those made for a business purchase. A B2B purchase has stakeholders, buy-in, influencers, lifecycle costs and a multitude of other considerations.

Let's break it down into a couple of lists so it's easier to see the differences:


  • Product driven
  • Focus is on features
  • Large target market
  • Maximize the value of the transaction
  • Single step buying process with shorter sales cycle
  • Merchandising and point of purchase (POP) activities
  • Brand identity created through repetition and imagery
  • Emotional buying decision based on status, desire or price

  • Relationship driven
  • Focus is on benefits
  • Small focused target market
  • Maximize the value of the relationship
  • Multi-step buying process with longer sales cycle
  • Educational and awareness building activities
  • Brand identity created on personal relationship
  • Rational buying decision based on business value

The marketing strategy you use will start out the same for each: Identify who the customer is and why they need to hear your message. After that, the process diverges. The goal of B2C marketing is to convert shoppers into buyers. B2C companies are more likely to use coupons, banner ads and sale offers to turn the shopper into a buyer. B2C is about the transaction. The B2C company has done everything in its power to make the buying process as smooth and painless as possible because if the buyer experiences any kind of hassle, they'll skip the purchase. Take online often have you or someone you know gotten frustrated with trying to check out? More than a couple of clicks and you're done. You abandon your cart and go somewhere else. All it took was one e-mail ad or banner to get the customer there. All it took to lose them was a difficult purchase experience.

B2B customers, on the other hand, are about the relationship. They want to know they have support for the product or a company they can return to later to make further purchases. Yes, the B2B company still wants to convert the prospects into customers, but the process is more involved and thus takes longer. B2B companies use marketing to educate various players in the target audience because the decision to purchase usually involves more than one person and they need to show how the product will save time or money or show some other benefit for the company. In this day and age, very often the first contact a B2B customer has with the B2B company is electronic, often the company website. The website should clearly communicate the features, benefits and contact information of the product or service. If the prospect contacts the company, the rest of the marketing plan comes into play. This campaign may very well include further steps such as webcasts, newsletters, direct e-mail, or personal follow-ups. Content is one of the prime focuses for B2B companies so getting media coverage, newsletters or white papers , or a facebook or YouTube presence out there helps educate the B2B prospects and lend credibility.

That brings me to my topic for my next post: social media as a marketing tool. See you next time.

Monday, August 8, 2011

Market vs Marketing Research

I know. Who knew there was even a difference, right? Let's break it down into the most simple of distinctions: Market research is an organized effort to garner information about markets and/or customers while marketing research is about the processes you use to identify and define marketing problems and opportunities, e.g. how changing elements of the marketing mix impacts customer behavior.

Market research is an important component of business strategy, and usually takes place before planning the marketing mix. There are many ways to conduct market research but most fall into five basic methods: surveys, focus groups, personal interviews, observation and field trials. The method you choose will depend on what type of information you're looking for and how big your budget is.

Surveys are probably the least expensive method, but the response rate varies hugely: in-person will, of course, net you 100%; phone surveys approximately 50%; online surveys depend on the target; and mail surveys...well...single digits. Focus groups and personal interviews are similar in style; focus groups generally require a couple of hours and at least three to five groups to be effective while personal interviews usually need about an hour. Neither method is considered quantitatively reliable because it's too small a sample, but both give great information on customer attitude and insight. Observation and field trials give you the most objective information as they take place in more of a real world setting.

Marketing research can be broken down two different ways: by market or by methodology. Most often, you will see it broken down by market: Consumer marketing research (B2C) and Business- to-Business (B2B) Marketing research. When broken down by methodology, you will see it discussed as quantitative and qualitative. I prefer to break down by market because I find that both quantitative and qualitative are valuable in the end, and provide much better information when used together.

Although quantitative gives you a great picture of all the numbers, helps you locate the outliers, quantify trends, get hard numbers on likes and dislikes, it doesn't help you understand the customer. It also has a number of potential chances for error that could gum up the entire works. There are five groups of errors and within each type are 5-10 specific types of errors. Nothing gets a customer, whether they are internal or external, going quite like an open-ended question. It's also a very effective method of gaining support and buy-in. People love to know that you think what they have to say is important.

So...there are your basic differences between the two types of research. Next time around, I'll go into B2B vs. B2C marketing. I'll bet you think they're both the same since it's all marketing to people.