In the last 2 posts I have written about how you can estimate a rough budget and then what you need to figure out in the B2B market. In yesterday’s post I again emphasized on the concept of Marketing Stamina.
Today we will look at how you work out the economics of your marketing.
So we know we have $25000 with us, we also know that the lead time to convert an enquiry into an order could be about 3 months (longer if it’s a high value purchase). What we don’t know is that who among your prospects is going to raise their hand to ask you for your product or service.
If we start with a pack of say 1000 company names then you the inevitability principle 500 of them will change their vendor in the next 3-5 years. You only don’t know which 500 of them will and when in the next 5 years. They obviously won’t all happen in the last quarter of the 5th year also.
So we have to figure out a way to be in front of these 1000 prospects continuously. The media you choose can vary – print, PPC, LinkedIn etc. Depending on the demographic profile and the cost of reaching that profile on a regular basis.
What you have to keep in mind that your budget has to last you through the year such that you can get at the least 10 customers.
Till next time then.
In yesterday’s post I showcased a quick and dirty method to identify your budget for doing marketing activities. Once you have identified with your rough calculation the amount of marketing budget you need to ask for and the outcome you have to deliver, you now need to figure out how you will go about your campaigns
In B2B the lead time to get an order is quite large – large is a relative term – depending on the size of the deals that you are looking for. The second characteristic of the B2B market is that generally there is no impulse buying especially in the mid to large companies. The third characteristic is that there are multiple buyers involved in most B2B deals, so the inertia is larger and the decision cycle is complex.
What this means is that you have to have the marketing stamina to ensure that you are able to consistently get in front of the customer with your content so that when the need arises at the customer end, you are in front of them and they call you first.
The advantage with B2B customers is that they are what Dean Jackson would call as semi visible. Meaning you can get a list of companies for most combinations. However within the company its difficult to identify who are the people involved with what you sell and the dynamics within them. Where are the power centers that you need to be aware of.
Since it is easy to identify them, B2B customers are inundated with a whole lot of marketing material. the other challenge is that even if you know say the decision maker is a CFO, chances are that the research on a new vendor or product will be done by a junior who will be assigned the job. So you either run parallel campaigns for different levels, or you run the campaigns in such a way that the people can easily remember you and handover details to the person who is researching.
Due to this I used the term, Marketing Stamina. It takes time to build a momentum before which you can get some real enquiries.
Till next time then.
When I was younger and people would ask me what I did for a living – my typical answer would be – I get out of the house on my rounds and sell whatever I have been asked to sell that day – some times its potato chips, sometimes its computers. That was in a lighter vein but over the years I have been involved in selling so many different products and services that I don’t actually see too many differences.
I fundamentally believe that selling is selling. Irrespective of what you are selling and to whom you are selling. Whether you are selling a product or a service, at the end of the day, the customer is buying a result that the purchase will give her/him. So you need to figure out the result that the customer is looking for and how you can get them the result. However there’s a lot of academic discussions which talk about why they are different.
My two cents on this topic are as follow
- Every thing that you sell has a nuance to it. Even within products – different products would have different kind of audiences , different price points, different results, same would be the case with different kinds of services
- The orientation of the consumer sale would be different from the business sale, in terms of the complexity involved in the business to business sale (i.e. number of people and steps) and the time involved.
- The way you showcase the result could be different – in consumer products you use advertising, while in B2B you might use a direct sales team.
- The way you solicit the business may vary – but some consumer products are also sold to businesses and what was once considered a business product (like computers) could soon become a consumer product.
Inspite of all the above points – one distinct difference is that , generally, products have well defined boundaries while it is tougher to put boundaries on what is constituted as a service because humans are involved in the delivery. So standardisation is much tougher.
In most cases today, the product and service get intertwined – do you go to a restaurant because the food is good or because the ambience and service is excellent or all of them.
Till next time then – it doesn’t matter what you are selling as long as you know the result you get for the customer – rest of the things can be managed.
So in my last 2 posts I wrote about couple of areas, on how as a product manager, I would get my forecasts wrong.
In this one, we will talk about competition. Whenever there’s a good market, you will have competition come in, sooner rather than later. The more the competition, the more the challenges because you have to estimate in advance how competition would react to your offering.
The advantage of the B2B market is that generally, the competition is defined. Until a rank outsider comes in with a revolutionary product, generally the B2B space is defined and the products/services are also known.
In the market – perception is the reality. So if your competition creates a perception of a superior product/service or a cheaper service or a more flexible service, then all your forecasts can go haywire, if the market believes that your product is inferior in any way / more expensive / less flexible.
When you are working with a specific software tool or you are a partner for only a specific kind of equipment, then your options for differentiation decrease. It limits you to primarily two things – experience that you have and the kind of technical expertise that you have created.
If its your own product/service you can leverage on other things like the kind of packaging that you do, or the software code that you have built.
From a competition perspective the other thing that you need to note is the number of sales people in the market from your competitors versus yourself. If you have 3 sales people while you have competition with 7 sales people each, then its not practical for your team to outrun the competition. Your competition will always have more people covering more accounts. Which means your chance of losing a deal is always higher. Planning without this aspect clearly articulated in your assumptions is a grave mistake.
But marketing – especially in B2 is very interesting because of these factors.
Till next time then.