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.

Why Must Future MBAs Know More About B2B Buyers?

Segmentation, targeting, and positioning.

These are foundational concepts of any good MBA course focused on market strategy.  If you don’t start with “who” you want to reach — and understand whether or not the audience represents a lucrative market for your products or services — then B2B marketers stand to waste a lot of time, effort, and money. 

Ask Phil Kotler, if you don’t believe me!

Yes, this is all true.  But today it’s not enough.

B2B marketers set themselves up for disappointing results if they stop short at positioning and fail to look at what motivates purchase behavior and how buyers buy. This is a tough one for many B2B marketers — those with a tech bent in particular — because we tend to think we sell to companies, not people. And we tend to talk a lot about our companies, products, and features, not about the problems and issues buyers care about.

Profiling, personas, and “behavior”-graphics are tools B2B marketers should use more to shape marketing strategy. Knowing how the business purchase process work — all of its intricate, convoluted glory —  is as important to choosing where to play in the market as are understanding what you do uniquely, the market potential for your offerings, and how you should communicate and deliver your capability to the market.

I explored the how and why of B2B buyer behavior with Professor Ravi Shanmugam’s Marketing 551: Marketing Analysis and Decision Making class at Santa Clara University’s Leavey School of Business this evening. I was the “special guest lecturer” — which means I got to talk with a bunch of bright, aspiring marketing students about business buyer behavior and why great marketers need to know their audiences intimately to succeed.  Some of the more interesting points of the discussion centered on:

1) Whether or not B2B personas are any different than B2C — and how the process of building personas is very similar, but the components and features that make up the B2B persona are different.

2) Which characteristics distinguish the B2B buyer from the B2C — and whether B2B buying motivations and behavior more or less complex than B2C.

3) Why knowing the difference between decision makers, influencers and gatekeepers (like purchasing agents) is important in understanding buyer behavior.

Still surprising to me, the students seemed more interested in Xerox and what I did as the head of industry marketing there than in hearing about theory or research insight. Examples shared on thought-leadership, promotion of educational/industry content (in the form of webinars), and integration of social media into the marketing mix were popular.

As always, I asked Prof. Shanmugam’s class to comment on my presentation and discussion through this blog post.  (Professor Shanmugam offers class participation credit if they comply with this request!) Please read their comments to learn what this future group of MBAs think about as they reflect on our session together.

Exploring Buyer Behavior With Santa Clara University MBA Students

B2B marketing is about positioning products or services to companies that can help solve business problems, right?

Not entirely.  Good B2B marketing is about selling to people, not companies. People who run these companies have needs, wants, and motivations just like anybody does — and B2B marketers must understand, message, and cater to those motivations to engage buyers and develop qualified leads that feed the revenue generation engine of the company — sales, both direct and indirect.

Tonight I shared this insight, and a few others, with with Professor Ravi Shanmugam’s Marketing 551: Marketing Analysis and Decision Making class at Santa Clara University’s Leavey School of Business. We talked about business buyer behavior and why great marketers need to know their audience intimately. Previously, I put the slides on Slideshare – which you can find there with a few minor changes. From my perspective at the front of the room, here are some of the points that caught the class’s interest the most:

1) Unlike consumers, whose motivations can be fickle and subject to emotionally charged (and sometimes irrational) factors, B2B buyer motivations are more straight-forward. B2B buyers want to purchase products — or hire other companies — help them solve problems, make them appear competent to management, peers, and other executives, increase their prospects for future employment, and — ultimately — increase their wealth from this success. Sure there are other factors, like power and recognition, that factor into the B2B buyer psyche, but keeping the boss happy rates right at the top.

2) B2B buying is a group effort; there is never only one “persona” that you have to understand — and communicate to — in your marketing activity.  Figuring out these key personas and the role each plays in the buying process is difficult.  New advances in marketing analytics — and the emerging ability to mine social channels and profiles — makes this easier, but it’s still a lot of hard work to get buyer profiling right.

3) B2B marketers can get caught up in the execution treadmill and tend to focus more on tactics and metrics than audience and business outcome. Simple tools, like the POST methodology and behavioral modeling (like Forrester’s Social Technographics), can keep business marketers from losing sight of marketing’s real purpose — to help build demand ahead of the pipeline and help to scale the sales organization.

4) Current customers can help to inform buyer behavior as well as acquire and influence new buyers. Case studies, customer testimonial, and affinity marketing all help to demonstrate that B2B sellers understand customer needs, can help to solve key problems, and do so in as a business partner, not just as a supplier.

As I did in October, I asked the class to share their reactions to what I presented by commenting on this blog post.  (Professor Shanmugam offered extra credit if they complied with this request!) Compared to the last cohort, these students appeared to me to have more experience with sales and marketing. A couple mentioned that they currently work in sales. They asked great questions about whether segmentation applies in account-based sales management (it does!) and what I see as the key differences between the role of the CMO and the CSO (Chief Sales Officer) in revenue generation.  Please read the comments to see whether my views resonated with these future MBA graduates and how my talk reflected their own experiences.

3 B2B Buyer Behavior Principles: Segmentation, Personas, and Profiling

Business-to-business marketers have long struggled to reach decision makers and measure marketing results. Over 50% of the almost 570 respondents to my 2006 Forrester survey put these two issues at the top of their list of marketing challenges. It’s not branding, it’s not budget, it’s not competitive threats.  Finding the right prospects to engage, and demonstrating that marketing had an impact on this process, is what keeps B2B marketers awake at night.

I think B2B marketers, especially those in high tech firms, struggle because they don’t spend enough time understanding who their best customers are and what distinguishes those customers from the rest. Knowing your customers takes discipline – it’s simply not about conducting satisfaction surveys or publishing customer success stories.  B2B marketers need to analyze business buyer behavior and using the findings to inform their go-to-market approach. It’s about knowing and managing your Buyer’s Journey.

Tonight, I had the wonderful opportunity to share my insights and perspective with Professor Ravi Shanmugam’s Marketing 551: Marketing Analysis and Decision Making class at Santa Clara University’s Leavey School of Business. We talked about the fundamentals of business buyer behavior and how to “get to know” your audience. If you would like to see the slides, I put them on Slideshare.

At Xerox Services, we believe in customer segmentation, profiling, and analytics. We deliver professional managed print services as multi-year contracts worth several millions of dollars.  Not your typical corporate purchase: there are a select number of organizations who need (and can afford) what we offer. But the business value is clear: we save our clients more than they spend.  This means that account identification and profiling is very important since we orient around a sales-centric go-to-market model.

From an industry marketing perspective, we also know that “knowing” who your buyer is — what are the key issues that concern him/her and how Xerox Services can help — is also crucial to making those sales interactions meaningful and to building a lasting relationship. Drawing from this experience, I shared with the Marketing 551 class, the following principles behind B2B buyer behavior and analytics:

1) Segmentation.  Critical to helping marketing to focus on “who” in the market you want to engage with your messaging and offers. Based on your market definition, segmentation shows you where the best market opportunity for your products and services will be.

2) Personas. Once you know “who” to target, personas help you understand “what to say” to them. As a representation of a real market group (i.e. segment), personas help marketers crystallize their message and speak in the voice of the customer, not market-speak. The best marketers create personas based on attributes that are relevant to purchase decision-making — not on generalities like industry, buying role (decision maker, influencer, etc.), or functional area.

3) Profiling. While most marketers are very familiar with firmographic information, and how to use it, many have yet to understand the importance of profiling behavior. One example of behaviorial analytics is Forrester’s Social Technographics, which describes a buyer’s propensity to engage in online, social behavior.  In this always-connected world, business buyers are becoming more willing to take purchase cues from peers and “knowledgeable experts” than traditional, company-lead media and messages.

I’ve asked the class to share their reactions to what I presented by commenting on this blog post.  By and large, these students are employed full-time at top Silicon Valley firms. They also tend to have technical/engineering backgrounds or current responsibilities. Take a look at the comments to see whether my views resonated with these future MBA graduates from my alma mater.

Best Practices For Marketing To Buyers “In The Cloud”

“Cloud computing” is a very hot topic, and like social media, subject to much debate about “what is cloud computing?” and “what does it mean for business?” Simply stated, cloud computing lets your customers and potential buyers take advantage of services and resources delivered as an online utility. Buyers get the benefits of using your technology without worrying about the technical details as much as they would if they implemented software inside their data centers. The benefits can include: lower capital investment, faster implementation, reduced risk, proven security and improved scalability to handle the increased amounts of data. Purists believe that true cloud computing requires large scale sharing by infrastructure/application providers and their consumers alike. While my colleagues at Forrester try to sort out the market and make it easier for IT buyers to decide where to invest, I’d like to explore the idea of marketing to customers in the cloud. 

B2B marketing needs to embrace the cloud. Most executives see marketing as a large discretionary line item in the corporate budget. During tought economic times, that “discretion” gets cut more often than not.  Marketers perpetuate this short-sighted perspective when they focus more on program and campaign spending and fail to invest in the capital or IT support needed to make marketing execution more efficient and the results more visible to the organization. Cloud computing can give marketers ready access to technology and services that can drive demand and evaluate the effectiveness of their programs without the burden of traditional technology implementation and management.

Cloud computing will also transform the way marketing gets done. In this Web 2.0 world, buyers spend more of time online searching for information, interacting with like-minded colleagues, and comparing offerings long before the first sales call occurs. Cloud-optimized marketing strategies such as social media, paid search, search results optimization, content syndication, and engaging with buyers on social networking sites like LinkedIn and Twitter deliver brand building and customer engagement results.

To futher explore how social media marketing in the cloud can help to build deeper — and eventually more profitable — customer relationships, I joined Jon Miller (VP of Maketing at automation rising-star Marketo) and David Alston (social media guru who heads up both community and marketing at Radian6) on a webinar, which you can access here.  During the event, we looked at a number of different cloud-related topics including:

1) How to use Forrester’s Social Technographics® Profiles of business decision-makers to design marketing programs that not only capitalize on emerging social behaviors but also fundamentally change the nature of the marketing relationship between B2B buyers and sellers.

2)Forrester’s P-O-S-T methodology – Why starting with People, Objectives and Strategy first, then moving to Tactics and Technology is the best way to ensure success when using social media to engage with prospects and customers in the cloud.

3) How to use social media monitoring to engage prospects, build communities, service customers, uncover influencers, and listen for the point of need.

Over the next few months, I will join the the Marketing Cloud conversation to continue to explore how cloud-centric service and technology providers may be in a better position to serve the modern needs of B2B marketers who see social media not simply as a way to reach new audiences. More importantly, these marketers see social media as a tool to help them build communities of like-minded customers; customers who will remain loyal, buy more over time, and advocate to others on the marketer’s behalf to influence the standing and reputation his/her firm in a transparent, community-centric manner.  The 2009 Forrester Groundswell Awards winners in the B2B marketing categories demonstrate where this trend is heading.  But I would love to hear from you with examples of companies that you feel are doing an exceptional job of using social media to connect with business buyers who purchase high consideration products for on behalf of their firms.

DMA Webinar: Tracking Online Buyer Behavior in B2B

Next week I have the pleasure of speaking to several affiliate groups of the Direct Marketing Association about demand management. Please join me Wednesday, January 13, 2010, for a webinar-based panel discusison about: How to Track a Buyer’s Online Purchase Research Behavior: and then send appropriate messages to influence that buyer’s purchase.

As we see it, the Internet empowers buyers to research products and services long before engaging in a formal sales process — leaving marketers to guess when and how to engage with prospects. This almost guarantees that marketing messages will be sent to the wrong people at the wrong time — filling sales funnels with unqualified leads — a poor formula for permission marketing.

Smart marketers are harnessing digital technology to monitor and track buyer research behavior long before the formal sales process begins — to estimate buying stage — to predict buying intent — to evaluate buying influence — to send appropriate marketing messages to the right people at the right time — and to more accurately score leads for sales funnels. This yields a better formula for permission marketing.

The DMA invited two top industry experts (and yours truly) to help B2B marketers clearly understand how they can improve demand generation process by identifying, monitoring, and evaluating the online research behavior of prospective buyers.

Joining me are:

Steve Woods – Eloqua – Chief Technology Officer / Co-Founder. Author – Digital Body Language.

Debbie Qaqish – The Pedowitz Group – Chief Revenue Officer. Demand Generation Agency – Digital Buyer Behavior applications.

I hope you will visit the DMA Northern California site and join us for this educational, lively discussion!

Social Media Use Soars Among B2B Marketers: Really?

On July 20, BtoB Magazine, in conjunction with the Association of National Advertisers (ANA) published findings from the June 2009 online survey of 172 client-side marketers, 77 self-identified as primarily targeting B2B.  You can find the online version of the article here.

My colleague Josh Bernoff spoke at the ANA/BtoB conference today, called “B-toB Marketing in the New World“, and dropped me a quick note to say that his presentation — where he talked about “The Social Imperative in B2B Marketing” — was well received. He also shared an offhand remark along the lines of “those B2B marketers could sure use your help.”

At first, I found Josh’s comment a bit out of kilter with the title of the BtoB Magazine article, “Social media use soars among b-to-b marketers”. How can Forrester’s leading expert on social media strategy, co-author of Groundswell, find the ANA audience needing to know more about how to use social media successfully?  Then it dawned on me: use and success are not necessarily the same here.

The online article doesn’t include a key chart from the physical publication. The chart shows the percentage of b-to-b marketers using, or planning to use, the following “newer media” platforms.  (Again, planning and doing are two different things.) Reading directly from the July 20 chart, the data looks like this:

Your own Web site = 99%, email marketing = 94%, SEO-organic = 79%, Online ads/banners = 73%, SEM-paid search = 71%, Webinars = 66%, Social networks/social media = 57% (question: why lump these two together?), RSS feeds = 46%, Viral video = 42%, Podcasts = 38%, Video-on-demand and Wikis = 36% each, and Mobile, Gaming and Second Life bringing up the rear at 18%, 7% , and 6% respectively.

Surprisingly, not too different from Forrester survey findings published earlier this year. (See Figure 6 in particular).

The title touts the main finding, that among the 77 who responded, 57% of b-to-b marketers in this survey say they are using social media as a marketing tactic (remember, this is labeled as social network/social media), up from a mere 15% in 2007.

But let’s look at the numbers a little more closely: the first 6 items in rank order are not typically considered “social” media, but rather interactive tactics that many marketers have embraced gradually during the past number of years.

I think combining social networks and social media gums things up a bit because most marketers look at things like blogs, podcasts, microblogging (Twitter), open social networks (Facebook, LinkedIn, etc.), wikis, and even video as the more “social” tactics emerging in the new campaign toolbox. So, having a corporate blog, for example, could lead respondents to say “yes, I am using social media,” and inflate the number a bit.

I’m guessing subscribers to the ANA can get a final version of the report and look at the data directly. But this article highlights how — despite the hype — “social media” is an emerging concept and the definition of what is “in” social media (and what is not) is not commonly shared.

What is more interesting is a paragraph from the August 3 press release published by the ANA prior to the start of the conference.  To quote, it says:

“In 2009, the most effective newer media platforms were as follows: Search engine marketing (SEM) (65 percent), Own Web site (59 percent), Search engine optimization (SEO) (55 percent), E-mail marketing (45 percent).”

Ah, so when evaluating whether these marketing approaches are “effective,” the “social” media don’t yet meet a majority of B2B marketer expectations. While use is soaring, that use is still fairly experimental, and questions about how this activity pays of in direct business value begin to arise.

Today, Josh told the Chicago conference audience, “to reach B2B buyers with social technologies, concentrate on objectives.” This is a key theme in Groundswell, a tenant of our POST method for setting social strategy, and the principle behind Social Technographics – you have to understand how your audience engages in social activity, and what you want to achieve by engaging with them, to make social media succeed.

Perhaps the most interesting points were made by several of readers who left comments about the July 20 article online, in particular Liz Stott, Marketing Strategist, Penton Media.  You should read the whole thread, but I can’t help but quote Liz to close this post:

“My only word of caution to marketers would be to determine if your prospects/customers are really using SM for business decisions, before you dedicate full time employees to community building roles. Marketers see SM as “free” – but it’s not free at all, especially when you consider the Value of Time, and the high costs associated with community building personnel.”

Couldn’t of said it better myself.


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