A common assumption is that when businesses buy from other businesses, especially commoditized products and services in b2b markets, that price is the main factor.
In data that we’ve collected, this appears not to be the case. Only 20% of b2b customers put price before all other issues. That means a massive 80% are looking for more from their suppliers. Even in heavily commoditized markets such as utilities, fewer than 50% of buyers are putting price first.
It’s the job of marketers, therefore, to sell products and services based on the value they provide, and not on the price. To successfully differentiate the company from competitors, a focus on three things is essential: branding, customer experience and product development.
Just like in consumer markets, business customers will use a brand’s promise to evaluate products and services. Although 50% of b2b businesses say they focus on branding, our research shows only 37% regularly assess their brand’s health.
It’s important that firms wanting to compete on value frequently assess the familiarity of their brand, whether customers view the brand as different and a better option than competitors, and how well the brand delivers on its promise across all customer interactions.
Understanding the entire customer journey, from first contact through to contract renewal, is essential in developing a consistently strong customer experience. While 50% of businesses say they are focusing on this, our data shows that only 28% rate their customer journey mapping as “excellent”.
To get to “excellent”, every part of the organisation, from the IT systems to supply chain management, must be aligned towards achieving a seamless and effortless experience for the customer.
All businesses should concentrate on having a fresh and relevant product portfolio. A good figure to aim for is at least 30% of your offerings should have been developed in the past 5 years. While 52% of businesses cite product development as their main priority, 57% of businesses see it as their toughest challenge.
Firms wanting to improve on their product development efforts should spend less time thinking of new ideas and more time on eliminating the ones that fail. Only then should companies turn to the remaining concepts and test them in realistic conditions. It’s also important to note that innovation doesn’t always need to be about products, innovations around service and internal business processes also help.