To Choose Where You Play in the Market: Know Your Buyers Well

What do MBAs need to know about Buyer Behavior?

During the past couple of years, I have had the wonderful opportunity to guest lecture at my alma mater, Santa Clara University, to new classes of MBA students. This is something I do twice a year at most, and I love to give back to the business school that kick-started my career in marketing.  My topic is Buyer Behavior and why it matters in B2B focused organizations, where keeping a direct sales force — or channel partners — happy and productive often becomes the primary focus of the marketing organization.

Tomorrow night, I will attempt to impart words of wisdom to Professor Ravi Shanmugam’s next class of unsuspecting scholars.  As always, I will ask them to share their reactions to my presentation by commenting on this blog post. Most Santa Clara MBA students are employed full-time at top Silicon Valley firms and many hail from technical or engineering backgrounds.

Which will make for interesting discussion, since my comments tomorrow evening will focus a bit more on the healthcare industry. I plan to talk about how — in my new role this year heading up industry marketing across Xerox – we are making online, social, traditional and (frankly) unexpected moves in this industry.  Unlike high tech, this is an industry where Xerox is better known for supplying copiers used at the nurses’ station or admissions desk than for solutions we bring to hospitals, insurance companies, government agencies and employers to help them simplify how each manages the health of its respective populations.

Segmentation, personas, and behavior profiling continue to be the tools that good marketers use to understand how and communicate why buyers purchase from technology suppliers. Increasingly, these tools also help marketing executives determine where to head in a strategic direction (e.g.  grow current solutions versus invest in new ones), define how an organization uniquely creates value and plan how – through market execution – to deliver that value to customers.

Today, I think many B2B marketers stop at segmentation and targeting when they answer the question “what type of buyer should we attract?” The temptation to put buyers in broad, all-encompassing categories is difficult to resist.  Marketers want their message heard by more people than fewer.  The irony is that less truly becomes more in many B2B marketing opportunities.

Better marketers (and their sales counterparts) understand the detailed, specific issues buyers face in their respective markets. They understand what motivates buyers and why one buyer’s needs are distinct from another.  This understanding makes it easier to engage prospects in meaningful conversation about how your products and services can help them. Demonstrating that you are part of a community focused on solving key business problems (not just trying to sell stuff) is also important to creating belief in buyers that it is worth the time to have a conversation with you. Personas are a primary tool to help you move from technology supplier to industry insider. Relentless study about who buyers are and what causes them to buy keeps these personas current and useful as tools.

This is the essence of the advice I hope to convey to this class of soon-to-be-MBAs.  I will see how successful I am at achieving this goal based on the comments I receive to this post.  Won’t you join me in reading their comments and seeing how I did?  Expand the comments link below and join the conversation.

24 Responses to “To Choose Where You Play in the Market: Know Your Buyers Well”

  1. B2B TECH | Says:

    [...] Louis and shared expert advice for B2B marketers, posting a few tips from the lecture in her blog: To Choose Where You Play in the Market: Know Your Buyers Well, pointing out also to the irony that although marketers want their message heard by as many people [...]

  2. Laura Ramos Says:

    Prasanna, you have it right — personas bring life and color to the key differences between segments. Not necessarily a more narrow approach, but more of an elaboration. The bank account example does exactly that, it uses the two personas to represent the two different segments and illuminate how to address those segments differently.

  3. Laura Ramos Says:

    Great question, Katalin, and one that I struggled with at Forrester. Here’s what we ended up doing — Social Technographics showed that B2B buyers were actually more active in social media than we suspected. The vast majority, however, continue to be Spectators. They view information in social channels more often than they interact with it for business purposes. This means that marketers need to think about content, thought leadership, and putting out a relevant point of view to attract these Spectators. The ladder is a tool to help you diagnose whether or not you have characteristic differences between how segments use social media (and they may or may not), not necessarily as a map to tell you how to use social media in your marketing programs.

  4. Laura Ramos Says:

    Vijay, I have seen companies struggle with segmentation and persona building and I think it comes down to time and commitment. You have to really be dedicated to knowing your customers to be able to draw out the insights about how certain segments are different from each other and what are the key attributes that describe the buyers’ differentiated attributes in each segment. Keeping this information up to date, and getting the right parts of marketing to use it consistently, are the other big challenges. For more on this, look up Alan Cooper and his 1995 book The Inmates are Running the Asylum for a deeper look at the process and challenges.

  5. Laura Ramos Says:

    Good point Ishrag, I think the challenge for large B2B companies — with a diverse portfolio — is to create a differentiated story in the market place that does not sound generic or too much like your big competitors. At Xerox, our Ready for Real Business message platform is broad enough to do that, but allows individual lines of business the flexibility to say what it is they do under the broader story of “we help simplify your business so you can focus on what it is that you do best for the market.” Here is where the segmentation and personas come into play, marketing can then direct a specific message to a target audience as long as it remains true to the brand story. This actually helps to speed up the process of increasing awareness around “what we do” since we follow the model of saying what we do, why it benefits the customer, and specifically how that helps the focus on their core business.

  6. Laura Ramos Says:

    Michael, thanks for the comment. I think the transition was fairly smooth because Xerox has such a strong, recognizable brand and this gave more confidence to existing ACS customers that their investment in ACS services would remain strong. To be frank, our studies showed that the ACS brand did not have a strong following, which confirmed our decision to retire the brand. You can read more about this decision in my January 26, 2012 blog post.

  7. Michael Billikopf Says:

    Laura,

    Thank you for speaking to our class! I had a question about acquisitions. Was the transition of customers who already existed and were loyal to the ACS brand smooth after the acquisition to Xerox?

    Michael Billikopf

  8. Ishrag Khababa Says:

    Hi Laura,
    Before I go on to ask my question, I wanted to say great lecture and great blog!
    In your blog you mention that less is more in many B2B marketing opportunities. However, for companies such as Xerox that is trying to be known for something other than one very specific set of products and services, wouldn’t this approach be ineffective or at least take longer for the company to successfully increase awareness about the various products/services that it provides?
    Thank you for your time and insightful presentation.
    Ishrag

  9. Vijay Says:

    Laura – The class was very informative. I have one question. What are the challenges on deriving the information to create appropriate “personas” for a new target segment (as in case of HP) and What kind of “market research” process is used to appropriately identify personas?

  10. Katalin Kummer Says:

    Hi Laura,

    thank you for the interesting presentation about B2B buyer behavior.

    In particular, I would be more interested in how the Social Technographic ladder is used. Most individuals use several social medias but based upon their level of interaction they fit into multiple categories. However, even the same individual using the same media would fit into a different category based on his daily, weekly, monthly interaction habits.
    For example, if an individual uses Facebook on a daily basis but his interaction level varies from spectator to creator, how can this information be used effectively? Could you please mention a specific example?

    Thank you,
    Katalin

  11. Prasanna Kiran Angara Says:

    Hi Laura,
    Thank you for coming to our class and giving an insightful lecture. It was really informative and helped me understand the key buyer behavior principles in detail.

    I have a question related to Personas. Can we treat personas as a more narrow approach of segmentation? Referring to the bank account example that you mentioned in the class could we say those 2 people with different personas represent 2 different segments?

    Regards,
    Prasanna Kiran Angara

  12. Deepti Bogadi Says:

    Hi Laura,

    Thanks a lot for your response. Appreciate it!

    Regards,
    Deepti

  13. Laura Ramos Says:

    Wonderful first-hand example of the B2B buying and selling process at work, Tammi. Thanks for the example. Where the rubber hits the road is on how your vendor delivers on the tailoring promised up front in the sizing, planning and negotiations. Best of luck with a good implementation outcome.

  14. Laura Ramos Says:

    Kalyan, a persona gives you a “model” of the type of person that represents the segment. The details help the marketer (product developer, Web designer, etc.) understand the motivations, needs and aspirations of the buyer — key points to engaging them. It helps you to not only identify the type of buyer (who) but what you want to say to them that would make them respond to your offers. Segmentation identifies the best opportunity areas, and personas create the color commentary so marketers can deliver marketing messages and content that are more relevant. Thanks for attending!

  15. Laura Ramos Says:

    Deepti, very good questions — but there is only so much you can cover in a 1-hour lecture! Prof. Ravi asked me to talk about B2B Buyer Behavior. Deepening customer relationships and increasing product awareness are absolutely important B2B marketing topics. Deeper customer relationships also help to turn buyers into advocates for you. Referrals and references in B2B are crucial. When I say “buyer” I refer to either current or prospective customers. You are more precise on your last point. Thanks for the questions!

  16. Tammi Schmidt Says:

    Hi Laura,

    I watched the recording of your lecture – thanks for coming out to speak to the class. Very interesting to hear insights from a person at your level at a large company like Xerox!

    To add to the discussion around B to B vs B to C purchase process, I definitely have experienced that first hand. At work we just went through the selection process of a B to B vendor and it is definitely decision by committee. The vendor we selected did a great job of understanding our needs and tailoring their services to fit our business processes. We actually still haven’t finalized everything because our senior executive team had some follow up questions, so it definitely takes more time to close deals in the B to B world. But overall this vendor created the most customer value for us, so we plan to go with them.

    Thanks again!
    Tammi Schmidt

  17. Kalyan Posani Says:

    Thanks Laura for coming to the class! It was very informative and helped differentiate B2B from B2C techniques.

    I have a question regarding personas. What more do we gain by creating a persona rather than just segments which can also be based on attitudes and behavior? By this I mean how would adding more details such as person’s name, position, company name help? I think one of the uses is that it helps the company identify their targeted segments better by providing specific details. What are some other advantages with this approach? Also, isn’t there a risk of narrowing the segments? Thanks again for the lecture.

  18. Matthias Arnbert Says:

    Laura, thanks for a great lecture! As previous posters have already stated, I think the persona part of your lecture was especially interesting. It’s a great way to outline your audience in a much more manageable way. Other than that I also enjoyed hearing about some of the strategies Xerox is using to promote its newer elements of business rather than what Xerox traditionally has been know for.

  19. Deepti Bogadi Says:

    Hi Laura,

    Nice blog article! I could not attend your session in person but did not miss the opportunity of by reviewing your presentation and it was very insightful. One thing that I am wondering is why do the following topics not rate among the top 5 challenges B2B businesses worry about?

    1) Deepening relationships with customers: Does this not impact the B2B businesses as much as the B2C businesses? This also plays a critical role in providing them competitive edge over others right?

    2) Increasing product awareness: Isnt this very important to generate the demand?

    3) Understand prospect behavior: Should this not be considered as part of understanding the buyers -whether it is prospect or existing?

    Thanks,
    Deepti

  20. Laura Ramos Says:

    Jimmy, to answer your question: The purchase process. B2B is protracted where many B2C are spontaenous. Of course there are exceptions — think about buying a car or a home — but by and large, the consumer makes more immediate, viseral decisions where the B2B is more considered.

  21. Laura Ramos Says:

    Hi Manjeet, Thanks for sharing your time with me in class. I think the key mistake B2B marketers make when creating segmentation and personas in the B2B context is what I would call “taking the easy way out”. They think about segmentation at the obvious level — business vs. technology buyers for example — rather than looking at what really motivates and creates desire in buyers. Similarly, personas focus on the obvious differences than the difference that matter in the purchase decision making process. Yes, the IT buyer may be a middle aged male, but are there some IT buyers who focus on risk versus those who want to try something different and lead the way in innovation? It’s too easy to fall in the trap of “pat” answers than it is to do the work to figure out why certain buyers — who may have the same objective profile — do thing entirely different.

  22. Manjeet Singh Says:

    Hi Laura,
    Thanks for taking out time and speaking to our SCU MBA class yesterday. I thoroughly enjoyed the lecture and learned couple of new things which are very important in context to B2B marketing. You greatly outline the importance of creating a buyer persona.

    The one question I have is what is the key mistake businesses make when creating the segmentation and persona in context of B2B?

    Really great article.
    thanks- Manjeet

  23. Jimmy Says:

    thanks for coming to our class. what do you think is the #1 difference between B2B and B2C marketing? thanks

  24. Stephen Collins Says:

    Thanks Laura! The lecture was great and insightful. The main take away for me was the section on “Personas”. I think creating a persona or personas is a concrete way for everyone in the company to understand the customer in a similar way. I have seen companies the view customers differently depending on their position in the company (ie. sales, finance, ops, etc) Having a persona helps eliminate some ambiguity and allows the entire company to know their consumer in a similar way. The more concrete we can make our consumers the better we understand them. Very apt Laura, thanks again.


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