What the Heck is B2B2C Marketing?

The construct of B2B2C Marketing (Business to Business to Consumer) is a relatively newly named construct (2015 or so). What is it exactly? Like many things in the Marketing space it depends upon who is defining it. I will argue later in this post that there is only one process that constitutes actual B2B2C Marketing, and the rest are inaccurate definitions of what is actually going on.

Let’s start with a simple set of definitions. The first will be for B2B and B2C Marketing and leave out the B2B2C issue for a moment. B2C Marketing is the approach used to sell products or services directly to consumers whether through retailers (channel), on-line, or direct. This is the most common form of marketing. And to be fair, as you will read later, some experts suggest that selling through a retailer makes it B2B2C Marketing. A definitional disagreement and I also fundamentally disagree.

B2B Marketing is generally done by a company where their products are used by businesses. This can be a bolt used in a piece of equipment up to and including complex equipment or services used by companies. To further compound things we should define the term end-user as it relates to B2B. This is the person (or people) within the business who ultimately use the product or service sold to the business, and they may not actually be the buyer of that product or service for the business.

Thus we have a few terms for people who use what is sold/marketed: the consumer, generally the person who buys an item in a B2C sales; the customer (which can also be a consumer, but for clarity we will separate the term) who is the business entity who buys the item. This is not to be confused with a distributor, retailer or similar entity. These are not customers; though many companies refer to them as customers to differentiate them from the “end customer” in the case of B2B, or the consumer in the case of B2C. And lastly the end-user, who is the person who actually uses the product/service in the company that bought the product/service in a B2B transaction.

Confused yet?

One of the trends that many B2B Marketers have been late to the party in understanding is the fact that even though the products or services are purchased by and used by businesses; humans buy them. Thus, many astute Marketers caught on decades ago that aspects of B2C Marketing can be used effectively to sell B2B products and services. Modern trends are resurfacing this idea and include emotional based content as an example. How the user “feels” about their experience with or connection to the product/service is a powerful purchase motivator, even in B2B.

Another common example is selling thru industrial (or similar) distributors and now focusing also on the end-user. This is a bogus example of B2B Marketing. Not because you aren’t selling to businesses (the end-user in this case) but because you may think the distributor is a customer.

Distributors don’t buy anything they don’t expect to be bought by an end-user (either a business end-user/customer or a consumer). If your Marketing team focuses exclusively on the Distribution channel you will end up at the mercy of that channel. Your Marketing attention must focus on creating demand from the marketplace (whether business customers or consumer customers), not just trying to get distributors to carry the products. In fact, they won’t if they don’t have any demand. This is also an example of what some call B2B2C Marketing. It is not just because the distributor is not really buying anything to keep it. This is business to channel to customer/consumer. B2C2C if you like.

Another example of so-called B2B2C is influencers. Two examples that come to mind are medical professionals and financial services companies. Medical professionals do not buy anything on behalf of their patients, and only a few resell products, as a distributor. They recommend, and their advice is usually followed. Thus, medical products companies and drug companies usually work hard to get the medical community to recommend. This clearly requires a marketing effort, but it does not involve B2B sales. In truth some medical professionals (more all the time) are not open to having meetings with drug or device sales reps.

In a slightly different case, a surgeon may implant a device in a patient and usually the patient has no choice if they want a device other than the one the surgeon uses (other than to change surgeons). Again, this is not really B2B Marketing because the surgeon only needs to feel the device will work best for her patient and be comfortable using it. They are not buying it. This clearly requires marketing, but not really B2B.

Financial services companies sell their products thru professionals, either a captive network of sales people or a network of independent sales people. (In all cases these people are called financial advisers or insurance agents/brokers, not sales people, even though that is what they are.) Again, these agents/advisors are buying nothing. To suggest this is B2B2C sales is to suggest that any sales organization constitutes a B2B2C process, which they do not.

If you want to make a case for B2B2C Marketing and suggest that this is different, well all of the scenarios above are different. So what? Giving them the same “name” doesn’t allow for any professional consistency in how the products or services go to market. So, what is the point in pretending they are even similar or should be called B2B2C? Maybe because it’s cool?

What is the only true B2B2C market? Products sold to businesses which, when included in that company’s end-product, make that end-product more valuable to the consumer and therefore matter to the consumer. Many times, these included products are considered to be true “ingredient” brands, other times they are not, but the consumer values their addition and will make a choice to buy (or not) based on the inclusion of the product in the overall end-product they are actually buying.

Clearly a bolt is unlikely to be valuable to the consumer (at least what bolt it is doesn’t matter), but an ingredient could be; such as Dolby or GoreTex. These two companies spent a lot of money making their products valuable to the end-consumer. Many times consumers will ask for GoreTex outerwear. There is no such thing, but some outerwear brands include GoreTex. Dolby created demand so much so that when they were attacked by DTS and other noise reduction technolgy, they held off the challenge. That is true B2B2C Marketing. Making your included product, used by businesses, valuable to their customer constitutes true B2B2C marketing.

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What Is the Customer Actually Buying?

It’s not about what you sell; it’s about what the customer is buying. If you focus only on what you sell it rapidly becomes a commodity. If you focus on what the customer is actually buying, nothing needs be a commodity.

I was reminded of this again last week when the Palessi designer shoe hoax was revealed. In case you missed it, Payless Shoe Source created a “fake” designer store for a line of shoes from a made up designer, Bruno Palessi. They stocked the store with shoes they normally sell in their Payless stores for less than $40 and sold them for up to $600. Same exact shoes. Customers went nuts for these amazing shoes from a “recognized” designer sold in a store befitting the “brand.” (It was a former Armani store used for this “stunt.”)

Same shoes almost 10x the price because the people were not just buying the shoes. Want to sell your goods and services at higher prices? Stop focusing on what you are selling and consider what the customer wants to buy from you they might not be able to buy anywhere else?

Mitch

The Power of Who and the Power of Focus (Part 10)

For many years, we have espoused the idea of knowing Who should be your customer, and, sometimes more importantly, Who should NOT be your customer. Some recent research suggests that this is powerfully true in terms of customer satisfaction as well.

The July-August 2018 issue of the Harvard Business Review reports on a study done of thousands of banking customers and hundreds of banks that showed a remarkable correlation between reported customer satisfaction and who the bank “typically” serves. The study found that the variation in reported satisfaction had little to do with any other variable. In other words, the more the bank served those customers it was designed to serve, the better the level of satisfaction. The more it strayed into other bank services the less satisfied were its customers.

This again reminds me of the importance of focus. The narrower your focus the better your results.

The research demonstrates that to improve customer satisfaction, it’s not just about training, it’s about focus on attracting the right customers who value what you are designed to offer. If there aren’t enough of those customers, that may be a strategy issue for you.

While this research is about banks, there is no reason to believe it is unique to banks. Decide Who you want to serve and develop offerings and processes to support those offerings for those customers.  Be transparent about who you are “for.” Know who you are going out for business to serve, and focus on them.

Mitch

What Really Sets Amazon.com Apart

Amazon.com has claimed a relentless pursuit of customer-centric processes since its inception. Sure, Bezos’ access to VERY low-cost capital and minimal profit expectations gave him an advantage, but others have had those factors and no longer exist. It’s the fact that they are relentless in their focus on customers that makes the difference. Others have had it and lost it, FedEx is an example, but when your competition is UPS and USPS the bar is pretty low. Amazon has hundreds of competitors, so they can’t afford to lower their guard.

I was treated to a recent example of Amazon amazing this last two weeks and while the process needs improvement, the result was stunning.

I bought a file cabinet from one of their online stores, We Love Our Customers. (If anything was further from the truth, I am not sure what it would be, but I digress.) The cabinet arrived on time as agreed and needed handles screwed onto the 4 drawers (as advertised). Each drawer was to come with 2 screws. Unfortunately, one arrived with only one screw.

I contacted the seller and 2 days later they told me they would check with the “factory” to see if they could send me a new screw. 2 days later they told me they couldn’t but would offer me $8.00 as a credit or they could have me ship the unit back for a refund or replacement. I had not kept the box and could not believe they would want the entire product returned and then ship another for lack of a screw. I suggested if that was their solution they should just ship me another unit, I would remove the screw I needed and then ship the replacement back in its box. They didn’t like that idea, but offered no other solutions.

I escalated to Amazon customer service. Shortly afterwards I talked with a mediocre customer service person whose English was “ok” and who was clearly reading a script, but did want to help. She said she would look into things and get back to me and that I could file an A-Z refund claim. She called me back (pretty amazing) and, reading from her script, told me she was waiting for an answer from the seller. I filed an A-Z claim and was told it would be up to 2 weeks for them to “investigate.”

Meanwhile, I made several trips to the hardware store buying what I hoped would be the right size screw to replace the missing one. Turns out it’s a metric, fine machine screw, which, on my 5th try, I got right. So I have now solved my own problem. We Love Our Customers (liars) have said nothing and not communicated anything. Amazon calls me again (amazing) and I tell them I have solved the problem for about $25 in screws and 5 trips to the store. They offer to try to get me a $25 refund. I explain that is not really my issue. They do however, after another 2 days, get me the $25 refund.

I am quite upset by this whole process and have pretty much lost faith in Amazon’s vaunted customer service. Why? They don’t seem to be doing much, the rep is mediocre at best, and the A-Z process is taking too long. So, I start shifting my buying to other sites.

Today, out of nowhere, Amazon has refunded the entire purchase price and not asked for the item to be returned. Pretty amazing. Did it take WAY too long? Yes. Did Amazon lose some of my business in the mean time? Yes. However, what they ended up doing exceeded my expectations and I am now, again, a loyal customer.

Should they move faster? Yes. Should their reps be better English speakers without the need to read a script all the time? Yes. But the net result is more than most other companies would do. Good for them.

Mitch

If You Can’t Fix It, Feature It: Part 7

As I said in the earlier six posts in this series, one of my Group Executives at Teledyne, Roy Fields, said those words to me (If you can’t fix it, feature it) and they have proven hugely valuable. I think store’s position needs no further comment.

 

 

 

 

Mitch

A Brief Study in Contrast

Two customer experience stories in the same day. One is an example of great (and from an airline no less). The other is an example of pathetic, at best. Let’s start with the great one.

I was sitting in the Burbank airport waiting for my Southwest flight when the gate agent called my name and asked me to come up to see him. I did and he said he and Southwest wanted to thank me for being an A List flyer and that I would be getting a small gift from them. I selected free wifi on a flight. Southwest calls this Surprise and Delight. It did both. Well done.

Then at the other extreme we have Comcast/Xfinity. I needed to talk to them about a technical issue I was having and did not want to spend 30 minutes on chat. Try to find a phone # to call them. They make it almost impossible to call them. They claim they will call you but you must have an account # to do that. I didn’t have the #, so I just kept searching for the phone number. The website made it impossible, but fortunately my friends at Bing found it for me quickly. The technical problem was solved promptly (faster than finding the # to call). Wow how awful, but then they have an effective monopoly where I live so I am stuck with them (not that AT&T is actually any better).

What a study in contrast that day.

Mitch

The Try Something Loop

Most companies use the “try something loop” when they have a shortfall in sales that needs to be addressed in the short-term. The try something loop consists of having a brainstorming meeting to come up with ideas to increase sales in the near term. One of the ideas is picked (how it is picked can be a popular vote or other random method, including the one the boss likes best). The idea is tried and it usually doesn’t work, because if solving problems by brainstorming and picking was a good idea, most problems would be solved that way.

The “loop” often results in implementing a new CRM because many are convinced that if a new CRM is put in place, then a new process will result. It doesn’t.

The next most likely “solution” is to change sales managers. Apparently, according to this article, which summarizes the churn at the CSO level well, the tenure is now about 19 months. Even more volatile than the CMO. Rearranging the deck chairs continues.

If you want to improve sales, you need to know the root cause/constraint to getting more revenue. Today, in most US companies, those constraints are on the delivery side not the revenue opportunity side. “Tomorrow” it is likely to return to the revenue generation side. Don’t resort to the “try something loop” when that day comes. Learn to find the constraint or bottleneck and relieve it.

Mitch