Value is the only thing that matters in B2B Marketing

No company will buy capital equipment or build a new facility because they get a 20% off coupon, or see a great commercial on TV. Business customers buy what they need, when they need it. It is up to the selling organization to promote its offerings in such a way that Value is well understood and attractive.

A common and persistent mistake companies make when determining selling price is to base it on cost. There is no connection at all between seller production cost and customer value of a product or service. Instead the marketing manager needs to understand the economic value of his offering, i.e. what it is worth to the customer. This can be gleaned from understanding the value in use of, say, a component or subassembly.

For example, a tackifier or resin that promotes stronger adherence of a road marking formulation to the road surface, and makes it dry faster, can command a higher selling price than lower performance products. Or a rental company allowing customers to on-rent and off-rent locally staged equipment when needed can charge a higher rental rate.

Understanding customer value requires good customer relations and excellent communication. The Sales force is key in collecting and understanding this data, since they are closest to the their customers. There are also tools like Voice of the Customer (VOTC) that are used. It is marketing’s job to synthesize and aggregate this data on a market segment level. A segment is simply a group of customers with similar unmet needs, that would respond to the same value proposition.

Besides formulating value props, marketing can help the selling process through building strong brands and generating leads. An earlier infographic shows how social marketing can be used for lead management:

Finally, we want customer relationships to be long term, not just a single sale. This can be achieved with an effective Sales function, understanding customer pain and selling solutions to alleviate it. Oftentimes this involves providing different value- added services, like help with system design, technical service, GPS or RFID asset tracking, bundling or kitting of components, or joint research projects.

The sales person teaming up with marketing will have great opportunities to provide customer value, and the company consistently providing the highest value will get (and keep) the business.

Per Ohstrom is a lifelong Industrial Marketing executive who has lived/ worked/ traveled in 45 countries. He has experience from manufacturing, equipment rental, industrial distribution, and consulting. Per likes to read and write about industrial marketing, corporate strategy, PR and market communication, international business, sales, economics, leadership and a lot of other … Continue reading »


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