Asking questions in the market – 4

Marketing, messaging, Positioning, Questions, route to market

Over the last few posts I have been talking about how better questions can make a difference in the success that you achieve in the market. While my focus is on the B2B market, the general principle will apply to any market.

Today the questions I am talking about would help in making your messaging and route to market better. It will then help you identify the constraints you can face, the models you have to apply etc. Again I would highly recommend Dean Jackson’s Morecheeselesswhiskers.com podcast and his & Joe Polish podcast ilovemarketing.com

1. Is the product or service that you are wanting to sell going to be used as a first time buy. If someone has never used a motorized vehicle then a 100CC mobike is a first time buy for them. Trying to sell them a 650CC motorcycle will not work.

2. Will the product be an upgrade or replacement. If you know the customer is already a user of your Air Conditioner for the last 5 years then they could be ready for a replacement or upgrade. In IT is called a refresh cycle which each company decides.

3. Will the product or service be for emergency use. If a tornado strikes and there’s a damaged roof or water in the basement then you need to get it out NOW. Then there’s no time for evaluation of multiple options.

4. Will the product be an accessory to a key product. Smart phone covers are an every day example. So you need to be able to reach those buyers who use the phone for which you have the covers.

5. Will the product/ service be for the repair of an item. Duck tape is a very good example of this or a tyre repair shop.

6. Is what you are selling aspirational in nature. Then you have to target the people who already use something and may now have the money to aspire for something bigger or because their families or job responsibilities have changed. Aspirational is a little different from upgrade in the sense that upgrades are generally considered incremental in nature.

There could be some specific scenarios which apply to your business and have not been listed here.

Once you can map where all your product or service plays, you can design the market route, the messaging etc.

Generally I keep my posts short so you can read them while waiting in the line to get coffee. This one has become slightly longer. I hope its useful.

Let me know your views.

Till next time then.

Carpe Diem!!!

Identifying the dissonance for engaging a B2B customer

B2B, Business, competition, Marketing, Marketing Stamina, messaging, persistence, segmentation, single target market

With B2B customers, as I have mentioned earlier in my earlier posts, its difficult to get instantaneous decisions because of various reasons. These could vary from inertia to customers having to do cross functional team decisions, budgets and the works.

In most cases until the dissonance with the existing supplier is so large and repeated that the customer can no longer bear it, they don’t change. However in a bundle of 1000 prospects, the Dean Jackson “inevitability principle” eventually kicks in and some incumbents falter and that’s when you get a chance to stake your claim.

Now you need to be in front of the customer to stake your claim. In addition you should, on a consistent basis keep highlighting the possible challenges the customer could be facing.

For this you need to know your competition well. Competition could be from a company or an alternative technology. You need to understand the places competition is weak and then work your messaging to highlight the challenges the customer could be facing because of the those issues. These messages need to be about “rubbing salt over their wound” so that the pain gets even more highlighted.

Its not always possible to know all the challenges until you ask the customer and then hypothesize for others – since you have already focused on a narrow segment of the market. So if you get in front of a customer on the phone or in person or via web you need to check if they value the benefits that you offer versus what the incumbent does not have. You will then realize for yourself if those benefits matter to a decent set of your audience.

Once you have done that then the the key is to be persistent because we don’t know when the customer will decide to change. Also since customers do more than 60% of their research in the sales cycle even before they call the vendors, if you are not in front of them when they are doing the research, you won’t even get considered.

Till next time then.

Carpe Diem!!!

Single Target Market – Determining the viability in B2B

B2B, Business, differentiation, Marketing, Marketing Stamina, persistence, segmentation, single target market

I have consistently been harping on the fact that you need to find a niche in the market and a market in the niche. Finding a market in the niche is the critical part in determining if the market is even worth looking at. This is not about prioritizing on the different niches. Its about discarding a niche all together. Please understand that B2B buying is generally not impulsive. Which means you need to play this game over a long term.

For priortising of niches we will have a separate discussion.

Criteria for the B2B segmentation / niche viability

Your average deal size – recurring or one time
Gross Margin
Number of addressable prospects in the niche

Lets look at bundles of 100 or 1000 addressable prospects and I will share a simple model to do a quick calculation of the viability of the market.

Lets say you have a B2B prospect base of 100 and each deal is worth $100000/- per annum recurring. Which means the whole market is worth $10m per year and over a 5 year period if you were to be able to pick up 20 clients you can get a revenue of more than $20m cumulative approx. That’s a good market to be in, because with referrals and other things put together this market may actually end up being very large. Even at a 20% gross margin in 5 years you would make about $4m.

On the other hand if your average size deal was only $1000/- per annum recurring, then the market in 5 years may not be more than $200 thousand. Even if you make 50% gross margins, you will make at the end of 5 years about $100K.

So depending on the size of your average revenue you decide if the size of the niche is viable. The same $1000 product in a niche which has 1000 prospects could be worthwhile over a 5 a year period if you were able to pick up an share of 20% of the clients.

I have found that looking at a bundle of less than 100 tends to be scary because you don’t know how many of the clients will actually move away from their incumbent vendors. From a 100 prospects, Dean Jackson’s inevitability principle will lead to around 20 prospects in 5 years coming your way because some incumbent will make errors and if you are in front of the customer on a regular basis they will end up calling you just because they see you as persistent. A lot of time people don’t have the marketing stamina to last that many years.

Try working with this model and let me know if you found this useful.

Till next time then.

Carpe Diem!!!

B2B Messaging – finding the most effective channel

B2B, Business, differentiation, differentiation, ideal customer, Marketing, Marketing Ecosystem, messaging, segmentation, single target market

In consumer items there are a lot of ways to reach a customer – television, print, social media etc. Depending on where your demographic audience is and how the psychographics work out, you could also use good old direct mail and leaflets and tele-callers.

In B2B markets there are unique challenges. There’s a massive fall in print magazine circulation especially the business focused magazines. Not sure how many people watch television to check out the next business strategy.

In the B2B market, mail does not reach the person on the desk, because a lot of times people don’t have a desk and are mobile. So the mail has to be collected by the person by going to the mail room. Since people don’t come to the office so often and with Covid19, even fewer are coming to office so no one visits the mail room and the mail you send does not reach the intended recipients. So if you are targeting professional services companies, financial services etc. I have found direct mail to be a tough ask.

On the other hand if you were looking at companies which were more into manufacturing, utilities etc. I would guess direct mail would work especially for the back office functions and factory / warehouse functions.

Email is a quick, free medium and that’s it very basic problem. In B2B all the people are inundated with mail and you get a fraction of a second on the mobile phone, before the person ignores or deletes your mail. That is if your mail even reaches the person’s mailbox, because the spam filters will block your mail if they even observe a single item in the mail which smells of spam.

Before the pandemic started, webinars was a good way to get people to join you and hear your message, but I am observing a definite sense of exhaustion with webinars. The registration and attendance and company sponsored webinars has fallen dramatically. It may still be possible to get some attendance if the webinar is being run by an industry body or an independent analyst or a reputed media group with some respected industry veterans.

As a B2B marketer I am always looking out for some effective ways to get in front my audience. By ensuring that I target a “single target market”, and try and target only my ideal customer profile, I try to learn from each interaction that we have with a client and see how we can incorporate that learning into our next interaction. Its always a good idea to send a personal email to a person so that the spam filters don’t think you are spamming. You try to use as much knowledge you have of the industry to make this email so that the person reading it finds it useful.

Please let me know in case you have found any other method to reach your prospects in B2B in the comments below.

Till next time then.

Carpe Diem!!!