3 Keys to Retaining and Growing B2B Revenue

In the B2B World, 80% of your revenue comes from 20% of your customers. The reality is that losing just 5% of those customers could potentially sink your organization. So in this age of big data and rapidly evolving technology, what are the best ways to retain and ultimately grow those customers?

B2B companies must meaningfully engage with their customers to evolve loyalty into advocacy, and engagement begins with a relationship.  Through our work with over 50 leading B2B companies, we have found time again the following three key relationship building practices lay the foundation for account retention and growth:

1.    Educate, Don't Sell.  B2B relationships start with education, not a sales pitch. Educate yourself on your customer's industry, market, challenges, and opportunities, and then demonstrate how you can show them a path forward.  Providing relevant content through discussions and forums, blog posts and articles, and research is an excellent way to establish your credibility and begin the customer loyalty to advocacy journey.

2.    Customer Advisory Boards create a platform where you can leverage happy customers and drive innovation through customer co-design and collaboration. The end result is overall market alignment in offerings, communications, and strategy.

3.    Executive Summits bring key decision-makers together to preview a strategy, product, or market innovation. Through these focused exchanges, customers become first-to-know, first-to-buy, and first to advocate your solution in the marketplace.

Structured, proven, and dynamic educational forums, customer advisory boards, and executive summits help organizations develop a deep understanding of market conditions while building the rapport with key executives. This powerful formula turns customers into true advocates and is the best recipe for retaining and growing your top customers.

0 Comments »

Branding and Positioning in the B2B World

One of the biggest differences between B2B and B2C is branding or positioning your company.  Many extremely successful marketing leaders in B2C have a difficult time making the much needed adjustments to be successful.  In my book, The B2B Executive Playbook, I referred to Michael Jordan’s dominance in basketball and being labeled “World’s Greatest Athlete.”  But, the world’s greatest athlete failed miserably when he tried professional baseball.

He may still be the greatest athlete, but he needed to apply his skills much differently to be successful in baseball.  What he also lacked was experience in baseball.  I’ve witnessed dozens of successful B2C marketing executives who have been met with the same results as Jordan did when they crossed over to B2B marketing. 

Commonly, I run into high-profile executives much like the one I worked with who came over from a major soft drink company.  He is a great individual.  He amassed all kinds of accolades and had great success at his former company as a brand leader of its flagship product. His honors included national advertising and marketing awards as well as several industry awards.  The financials were incredible too…market share gains, profitable growth, etc.  Then he jumped to a B2B and became the CMO in an industry which he had no experience.  The CEO was so excited to land him and even made him over product development as well.  He applied the B2C formula that made him a huge success at his old company.

Well, his new company had about 10,000 customers, but their top 50 customers were 50% and the top 200 were around 75% of the revenue of this $5 billion company.   He didn’t fully understand the impact of this and violated nearly every B2B success principle outlined in the book.  Most of what he did was in the name of branding, (new look, logo, tagline, positioning, etc.).  He committed millions to what made him wildly successful at his B2C Company…updated look and feel of logo, tagline, entertainment/event sponsorship and a broad ad campaign. 

The results were brutal:  sales went down, market share slid, margins tumbled, and because he also oversaw and shifted R&D dollars to marketing, their product started falling behind because they weren’t reinvesting like the competition.  In addition, many of their top customers were leaving them, signing exclusive long-term deals with the competition…never to return.  The only thing that collapsed more than the financial results during his tenure was the company morale. 

That CMO lasted three years. He has been gone for about three years now, and they still haven’t recovered from the damage that the B2C approaches caused to this great B2B Company.  It was like wearing a basketball uniform to a football game.  It was ugly. 

While there is no universal agreement on the definition of brand, the core is simply how the market views your company - your reputation.  It includes aspects like what your firm is known for, where the market believes you have value or have credibility, and your company’s personality and culture.

In the B2C world, the brand position is achieved much differently.  Let’s take the world’s most valuable brand, Coke.  I drink more Diet Cokes than I do anything else.  I have it stocked in my home fridge, in my work fridge and order it every lunch, etc…

The image of the Coke brand, for me as the customer, is contained to the advertising, the package design, others’ perceptions and my experience.  Think about it. Even if the package is damaged, in my head I assume my local grocer dropped it while putting it out on the shelf.  If it tastes bad when I order it at a restaurant, I put it on the restaurant for not have the right mix (syrup and water).  I actually do not know a single person who works for Coke! My touch points and interactions with Coke, as well as all my other brand goods, are similar to this (Crest, Nike, Sony, Tommy Bahama).

All of these B2C companies invest millions into understanding the various personas, segments, demographics, geographical nuances, etc. to determine how to position and manage these brands.  The same is true about all respected B2C CPG (Consumer Packaged Goods) brands.

There are two additional elements in the other major B2C category: Retailers.  For  retailers such as Starbucks, Disney, McDonalds, Target and others, the brand is also impacted by the store (look, experience, etc.) and the people (knowledge, culture, interactions, etc.).

In the B2B world, the brand position is also established with all of the above-mentioned brand-building components.  The difference, however, is the priority and weighting these elements are assigned, as well as the impact that a very few customers can have.  And while it’s only one element, that impact can be the difference between Branding Nirvana and losing your job (CMOs have the shortest tenure of all C-level positions and functions). 

Why are the customers more important in branding a B2B?

Because in the B2B world, the people you are selling to are industry veterans and most are also subject matter experts.  Simply put, they are living what you are selling.  They live and breathe in the industry you are supplying.  When GE Aviation sells jet engines to Boeing, the people that are evaluating and making the decision are engineers that have been in the Aviation industry for 15-25 years on average.  When Harris Broadcast sells content distribution solutions to Disney, the people evaluating and making the decisions are have 15-10+ years in the media industry.  The expertise, level of complexity, layers of customer contacts and overall sophistication of the prospect is exponentially different.    

In the B2C world, in a blind taste, 90% of the population can’t tell a $10 bottle of wine from a $100 bottle.  Nor can they tell the difference from free tap water and a $5 bottled water of Fiji.   But a sophisticated and highly emotional marketing and branding program can yield premium dollars for something which the buyer honestly can’t tell the difference. 

In the B2B world, it’s just the opposite.  While they may not know your specific offering, they usually know their industry better than those who supply it and how they will uniquely apply your product, solution or service.  They will scrutinize, compare, benchmark, test, and go to third parties and associations for references and validation. 

Think about the CIO who has worked in the financial services industry for 22 years. If you have IT solutions to serve this market, your company better know his needs, priorities, his environment and requirements…and most of all, you better have peers (fellow CIOs) he can talk to about working with your firm.  If you don’t have this, a well-designed logo, powerful tagline, slick campaign, elaborate brochure or PPT presentation will not overcome the lack of credibility to support a premium position.  Too much is at risk in his world: security of the bank assets, privacy issues, government compliance, the customer experience and the CIO’s reputation and career.   In fact, in a recent meeting, CIOs rated peer input as the #1 credible and trusted source for supplier selection.

In the B2B world, the most effective way to build or reposition a strong credible brand is through your current customers.  It’s how they describe their experience working with your company; it’s what they say you successfully delivered to them (or fell short of).  And the higher level they are, they more impact they will have.

0 Comments »

A Sustainable and Effective B2B Social Media Strategy

 

There are so many Social Media Channels today. So which ones are the most effective and sustainable for B2B organizations and deserve the most effort and manpower?  

For B2B organizations the 2 most effective social media platforms are discussion groups and blogs. According to a Forrester Research report, 75% of B2B Decision Makers interact with discussion groups by posting ratings or by leaving comments on blogs.

 

Discussion Groups

Discussion groups often pose questions, relevant concerns, and testimonials for certain products or services.  Engaging in these conversations can showcase your expertise or product solution and build confidence in potential clients.

Blogs

Blogs have the potential to reach clients globally.  These concise short articles, usually packed with relevant information provide an organization with credibility and reach that showcase their expertise, while also opening a channel of communication between author and readers.

Finding the best discussion group and building a following for your blog takes time and dedication, but is the most effective and sustainable Social Media Strategy for B2B Organizations.

0 Comments »

Three Sure Fire Ways to Guarantee Customer Advisory Board Success

Are you considering starting a Customer Advisory Board (CAB), or do you have one in place and are wondering how to ensure continued success? We've executed hundreds of CAB meetings, and while there are many keys to success, when someone asks me what makes a CAB program successful, I respond with these three important elements:

  1. The right people in the room
  2. Relevant content
  3. Follow-up communication

 

The Right People in the Room ... on Both Sides

Based on your CAB strategy, make sure the customers you invite are able to help you think through key issues and areas of your business, and answer the critical questions you will pose to them that will help drive your strategy, future services and/or product direction. People who can answer these questions are typically the decision-makers and high-level influencers, and you want to hear their combined perspectives. Also, attendees from your organization should be made up of the leadership team and/or P&L owners, plus functional leaders in Marketing, Sales, Development, Finance, and Strategy. Their only requirements are to be good listeners, ask probing or clarifying questions and never, ever fall into "selling" mode.

 

Relevant Content ... and Listening

Put an agenda together that includes topics of interest to your customers as well as to your internal team. What are customers' market needs and aspirations? Identify gaps; understand where they believe your organization may be able to help. What does your internal team need feedback, guidance, and input on - strategy, marketing, sales, product? Use this forum to listen and validate your team's perspectives on how they view customer needs. Leverage your time together to share ideas and learn from each other.

 

Follow-up Communication ... and Act

The final element to ensure CAB success is to follow-up with your advisory board members after the meeting. Based on their feedback, determine with your executive team what actions to take, who will be accountable, and the timing to complete. Let your CAB members know you've taken their feedback seriously by developing an action plan and sharing it with them. See another blog I wrote on this topic: Take Action After Your CAB Meeting.

 

 

0 Comments »

Social Media’s Role in Identifying and Acquiring Customers

 

If you are a B2B or a B2C organization, your next potential client is most likely searching on Google right now for information regarding your services. That might be a pretty scary statement to read if you don’t have an online presence other than a website. Getting found on the Internet is no longer limited to Google Ads or maintaining a website. In order to have a strong online presence, every business large or small must utilize social media.

 

The first step in Building Customer Advocacy through Social Media begins with both Marketing and Sales engaging with customers in Social Media Channels.

·      Marketing Role: Identify and engage in discussions regarding product/application solutions to potential/target clients via LinkedIn discussion groups, online forums and Twitter# tags

·      Sales Role: Networking among peers of target industries to identify potential/target clients

Social Media has quickly jumped to one of the top ways to identify, acquire new and keep existing clients. A recent survey by Dimensional Research reported that 90% of Customers said their buying decisions were influenced by online reviews from social media: Twitter, FaceBook, Yelp and Company Sites. This means Marketing and Sales need to work together on the 4 Functions of Social Media in order to identify new clients and Acquire new customers.

 

 

0 Comments »

Don't Think You Have Enough Customers to Warrant a Customer Advisory Board? Think Again!

A Customer Advisory Board (CAB) or Council, is made up of your top, most strategic customers – whether that equals 7, 12 or 20, they are the driving force of your success. Having a CAB program in place gives the leadership team the perfect forum to meet with these important decision makers.

How Many Customers Should You Have Before Forming a CAB?

We’ve delivered CAB meetings with as little as 5 customers to as many as 22 and found that the smaller groups are just as powerful as the larger ones. A good example is a $3B client of ours with 9-10 customers who account for 90% of their revenue. They typically have 5-8 members in attendance at their CAB meetings. Alternatively, another example would be a much larger $20B client with hundreds of top customers. Their CAB meetings typically have 20-25 attendees and we include breakout groups and roundtables, allowing all members an opportunity to provide feedback and share in smaller groups. These very different companies get the same benefits: robust discussions, collaboration, brainstorming and clarity on our client’s strategic direction.

Would a Customer Survey be as Effective as Holding a CAB Meeting?

Nothing really takes the place of face-to-face meetings for better understanding your customers and building relationships. So if you’re considering surveying customers as an alternative to a face-to-face meeting, just know that your results will be much different. Without a ‘live’ audience to provide context to, you’re more likely to get just a ‘snapshot’ on something more specific. You won’t benefit from the dialogue among customers that occurs at face-to-face meetings; there won’t be peer-to-peer sharing and learning; and last but not least, a survey doesn’t offer much in the way of relationship-building opportunities.

Building a CAB program and holding in-person meetings (once or twice a year) creates a “safe” environment for an open, interactive exchange of ideas. While surveys serve a purpose, don’t use them in lieu of a face-to-face meeting – use surveys for more quantitative feedback. Hold in-person CAB meetings to allow members to build on one another’s thoughts and work on solutions together. This peer exchange will also create an emotional commitment, strengthening relationships and improving retention.

0 Comments »

Is the Revenue Decline at Oracle a Blip or a Sign of Major Industry Shift?

What’s happening at Oracle isn’t isolated.  It is a symptom of what looms largely ahead for the information technology industry.

According to the Wall Street Journal's Don Clark and Steve D. Jones in WSJ's CIO Journal, Oracle blames its sales force for the decrease in sales…WOW!  But, it’s true. Oracle, and the other technology companies who have been kicking everyone else around, have made their bread and butter selling to IT leaders.  These IT leaders are also by definition, "leaders in IT."  As buyers, they understand and can translate the bits and bytes of technology offerings. They make the final purchase decisions and oversee implementation and support.  They also get to be their own judge and jury by defining their own success criteria, which are typically the factors most relevant to IT (uptime, response rates, etc.).

With technology solutions migrating from in-house applications which are purchased and managed by the IT department, to cloud and other delivery platforms outside the data center, purchase and evaluation decisions are being made by the business unit leaders the IT leaders have traditionally supported.  And also by definition, "leaders in business" have a completely different way of analyzing, managing, and buying the services that support their business.  My favorite quote so far which highlights the difference between IT and the new untraditional buyers of technology comes from Michael Hickins, the Editor of The Wall Street Journal's Morning Download, “Indeed, many of them are heads of marketing who used a credit card to pay for cloud based marketing automation or reputation management applications."  According to Nucleus Research Inc. analyst Rebecca Wettemann, "Among that customer set, 'there’s some trepidation' about dealing with Oracle."  Again, WOW!

Change of this magnitude and pace may rewrite the entire IT ecosystem and power structure.  Oracle out, Workday in?  Not yet sure where to place the bets, but the opportunity couldn’t be bigger for those who can translate the facts and figures of technology services into a vision that inspires the hearts, souls, and ROI targets of business (versus IT) buyers.  As such, I will be sure to use my AMEX to pay for our new IT system and make sure I get all my Delta Frequent Flier miles too.

0 Comments »

On-Line CABs Great for Users, Limited for Executives

Recently, a great question surfaced on LinkedIn about CABs: “Has anyone here implemented a successful online CAB group? If yes, how successful has it been?”

I find that online CABs can work well in certain areas, but have limited effectiveness in others.  For instance, with user groups and focus groups where you’re seeking incremental insight, online collaboration can be a great tool for getting input on feature/functionality or refining a product/service. 

On the other hand, if your CAB is more strategic in nature, and your members are the level of Senior Director or above, a face-to-face environment is more appropriate.  When seeking advice on your strategic direction, the conversations progress into deeper discussions – about business challenges and understanding your customers’ priorities, industry trends and sharing of market insights.  Face-to-face engagements build a certain degree of trust and provide a safe environment for sharing and networking, which we find results in a genuine “bonding” of the group.  Members appreciate the professional accomplishments and relish the personal relationships they develop.  Council meetings feel like “reunions” and customer members become advocates. 

Having said this, once these types of relationships and trust are built in a face to face meeting, online meetings can be effective supplement for small working groups between the face-to-face engagements. 

0 Comments »

Should Your B2B Organization Consumerize Marketing Efforts?

I recently read an article over on the Software Advice website that discussed whether or not B2B Organizations should Consumerize their Marketing Efforts.  While there are many practices that are transportable between B2B and B2C, (and some of these marketing tactics should be applied to the B2B world aggressively), the suggestions cited in this article are limited to simple and low price point offerings. For typical complex B2B offerings that require many stages of conversations and levels of signoff, these simply won’t work.

In addition, points and “gamification” may in fact represent a conflict of interest and forbidden by the purchasing organization. This is a strong case for why these two worlds must be approached so differently. All marketing isn’t the same. Some B2B marketing is similar to B2C especially when the user is the decision maker, but it can also be very different.

Business-to-business (B2B) companies are fundamentally different from business-to-consumer (B2C) companies. But far too often B2B leaders try to apply B2C strategies and tactics in their companies with disappointing, even disastrous results. B2B success requires a completely different playbook.

0 Comments »

Why a Customer Advisory Board is NOT the Same as a Focus Group

With the myriad customer engagement programs so popular today, Customer Advisory Boards (CABs) and Focus Groups often get “bucketed” together, yet they have clear and very different objectives.

Here's a "quick reference" chart detailing some of the key differences: 

Participant Attributes

The diagram below shows the core attributes of participants for CABs and Focus Groups, and another reason why these two programs are so different.

 

 

 

 

 

 

 

 

 

Sample Discussion Topics

And finally, here are some sample topics most common among the two initiatives.

Customer Advisory Board

  • Strategy
  • Direction of industry
  • Organization's goals/objectives to develop alignment
  • Discussions on: what services or offerings are missing; pricing/business models; overall product roadmaps; go-to-market programs (sales, marketing); account management

Focus Group

  • Reaction to logo/tagline
  • Emotional state (look and feel)
  • Usability study
  • Behavioral patterns/processes
  • Product feature/functionality

As you plan your customer engagement programs for 2013, be sure to target the right program format for the input you are seeking.  If you want to gain a deeper understanding of your customers' business, build closer executive relationships, and gain strategic mid- to long-term market insight, a Customer Advisory Board is the answer.  If on the other hand, you need qualitative short-term feedback on a product or branding message; or opinions/perceptions on a concept, service, packaging, etc., then a Focus Group is the right program.

0 Comments »