Marketing Week (MW):Do you believe business-to-business (B2B) and business- to-consumer (B2C) marketing are blurring into one, or are they still different?
Jonathan Earle (JE): There is similarity in the insights. Whether you’re in business or consumer marketing, the core insights are the same.
People used to spend time to save money, now they spend money to save time. Couple that with the fact that everything is so complicated these days, whether it’s a business trying to bring in new technology to reduce the time it takes to get things out the door or a consumer trying to switch their apps from their old phone to a new one, it is tough to do it yourself.
But that’s where it stops. When it comes to positioning, what is important for the consumer or business, the promotional side, the product being promoted, the service and the distribution, they are ultimately very different.
Shannon Edwards (SE): I think it depends on the audience and who your key constituents are. When I was working on a more B2B-focused business – ShopStyle – we had to make sure we were very focused on the target audience, which were fashion trade experts, and hone in on that.
My role now is B2C. I use similar tactics but focus on the key constituent of consumers. In some cases that can be challenging if you have a broad target base. For the maternity business, it is more focused. So you have to start with who your audience is and hold fast to that.
Naresh Chouhan (NC): B2C marketing is about maximum exposure of the brand around a group of consumers. That drives the volumes of messaging that you need to do. B2B marketing is more about identifying a few key individuals, and then providing a marketing wrapper around that. We may need to know which events they want to go to, which media they read, which social media they use and how we interface with that one person at different levels. Whereas in B2C you market to a series of segments, in B2B you’re marketing to a segment of one.
We have to be wise about how we spend, but there are many digital triggers that work off each other. It’s more digital now and experiential marketing tends to be a back-up to those particular channels. We often forget that business people are consumers. I use my iPhone for work purposes as much as I do for my own personal use.
MW: Does increasing use of digital channels and mobile devices mean B2B CMOs are treating business customers more like consumers?
SE: What is always interesting to me is that in some cases they’re the same person. Even if you’re focusing on more of a business audience, they are still a consumer. You have to recognise that if you are trying to get their attention, it will be in a business context, but you also need to know that they are reading the newspapers and are out shopping and doing their day-to-day activities just like consumers. On the consumer side, you have to know all the different ways in which you’re capturing their attention. In some ways that makes the argument for the potential merging of B2B and B2C. In either case, you can be talking to someone in many different contexts.
JE: From the research we have done, SOHOs [small-office or home-office workers] specifically are fed up of being treated as consumers. They want to be treated as businesses. There are expectations as a business, because they are giving you a considerable part of their working capital and they’re looking for a long-term relationship. That’s different from being a consumer and just paying a bill or making a transaction.
Paul Foster (PF): The broader Western Union company has based its raison d’etre on speed of money transfer – ‘money in minutes’. You can go to the local newsagent with £100 and 10 minutes later that money can be picked up by somebody in over 520,000 locations around 200 countries. One of our target groups has been migrants – people sending money home to their loved ones.
Efficient money movement is still the theme that runs throughout Western Union Business Solutions, but it’s about looking after a business audience – where can we use our infrastructure to add value? Charities are a key segment for us in Business Solutions, and nine times out of 10 customers want to send money account-to-account, but there may be times when they want to get money out in a humanitarian emergency. We can use our locations as a vehicle for distributing the funds that they want to send.
MW: Many B2B brands engage in prominent sponsorship activity. Is that about creating the same excitement and awareness as consumer brands, or are there deeper reasons?
Jonathan Becher (JB): Part of the reason that sports and entertainment is SAP’s 25th industry segment is because of marketing and communications. We started with it as a branding play, recognised it was a big business, did the research and convinced the company to treat it in the same way that it treats retail, banking and the public sector. I believe that we will make more money out of that than most of our other industries in the next five years, but I’m not sure the company collectively recognises that yet.
Sports are also a wonderful proxy. If a fan thinks a particular player should score in a particular situation against a team they have never played against and in a stadium they do not know very well, it’s because they believe it. But if the data shows otherwise and proves itself better than your gut instinct, then it overcomes the psychological barrier [of customers who doubt the need to buy a SAP analytics package].
PF: We see the benefit of the UEFA Europa League partnership because it puts Western Union in an environment where there are a lot of our business customers, and opportunities for corporate hospitality.
We also partnered with Unicef. For every completed pass in the Europa League during the three years of our sponsorship deal, we’ll fund a day of school for a child in the developing world. Apart from being a nice marketing thing to do, it impressed our Business Solutions customers.
MW: What is the overarching purpose of a CMO in a B2B organisation, as distinct from other business functions such as sales?
JB: Within B2B companies, there is almost always someone who is in charge of the product or service development, whether it is the chief technology officer, head of product or head of development. Their goal is trying to move away from thinking about products and towards solutions. That’s not what the marketer does. There is also almost always a head of sales or chief revenue officer – they, in my opinion, have a relationship with the customer.
They’re trying to move from a transaction-based relationship to a lifetime value-based relationship.
We as marketing and comms sit somewhere in the middle. We are neither the voice of the product nor the voice of the customer, we’re the voice of the market. Somebody has got to be thinking about what the competition is doing, and the person who is not yet your customer. Somebody has got to use classic consumer segmentation and marketing techniques to ask ‘what are the trends we can generalise between all the customers?’, and use those to make more strategic decisions.
MW: Have you experienced any cultural differences between B2B and B2C marketing, or difficulties in transferring from one to the other?
SE: It’s particularly easy if you know the industry. My experience has been in ecommerce and retail, so it didn’t really matter which side I was on.
It very much melded together. Whether difficulties arise will depend upon if you’re going outside your industry expertise. In fact, it’s fantastic experience if you’ve sat on both sides, if you’re talking sector- specifically, because you really understand the business that you’re marketing.
PF: I’m noticing that in B2B marketing, the benefit is more about the efficiency of what you’re doing – making sure the plumbing doesn’t have any leaky joints. How are we getting the leads in and making sure they are flowing through the pipeline? Are we having the right touch points at each stage of that customer on-boarding process? Are we tracking and nurturing those leads? It’s making sure the water pressure throughout is as high as possible, and less about how much marketing spend you’re investing and throwing into the market.
MW: Is there anything you think consumer marketers should learn from B2B marketers, or vice versa?
PF: There are a lot of opportunities for us to learn from the consumer side, particularly in using the broader assets of Western Union. Getting into the granularity of how you do the marketing, the techniques are very different. Within Business Solutions, we’re starting to export some interesting concepts back to the mothership around return on investment and building a closer customer relationship.
NC: When we plan our marketing we have to do it with a more integrated approach, which is where B2C marketing lags behind B2B. It is a numbers game in B2C. I’ve been a B2C marketer for a long time. I worked at Orange and Vodafone – I did the 3G launch for Orange – and in that case it was marketing to the ideal segmentation that we thought would fit the proposition, that could stand the price elasticity and that would react to the message.
That’s great, but it tends to be more tailored when we look at an individual within B2B marketing. When there are companies that we know would be an ideal fit for us, we have considered pointing billboards and plasma screens right into their offices. Media is getting smarter in and of itself, and that is key for us.
Disrupting the status quo
Business and consumer marketing show increasing similarities as the world becomes more connected, meaning speed of service across multiple digital and mobile channels is important for business people and consumers alike. It’s not only marketing and communications that are converging, though. Companies are also developing products and propositions that span both business and consumer markets.
Telefónica regional CMO Jonathan Earle explains: “Ultimately, B2B and B2C are creating a B2B2C segment. If you think about a small business with one shop, where the owners are working 17 hours a day to keep the products all in stock, to drive as much footfall as they can, they do very little promotion outside the local area. One of the things we’re looking to do is move away from conversations about minutes, texts and data, because, frankly, no-one cares about that. Ultimately, they want to know whether we can get more people going to their store.”
Telefónica is seeking to provide to these businesses not just mobile telephony services, but consumer-facing loyalty schemes operated on behalf of the B2B customer. This creates an added- value proposition for the network, involving a direct interface with consumers, but also providing small businesses with services they don’t have the resources to operate themselves.
“We can develop apps and websites very quickly, so we would then say to a small business ‘let’s help you develop those channels’. We can start marketing some of their products and services to new potential customers. We’ve also got tools like geo-location so we can target them with advertising.”
This can mean B2B providers come up against unexpected competitors. As a mobile network alone, Telefónica’s services would be highly unlikely to conflict with those of a payments company such as PayPal, for example. But Earle points out that PayPal is currently expanding to provide a B2B2C loyalty offering similar to Telefónica’s. Of all the ways B2B and B2C marketing are converging, this is perhaps the most disruptive of all to the status quo.
B2B brands and sports sponsorship
Benefits of sponsorship
One of the most common ways that B2B brands gain prominence and awareness is through sports sponsorship. It not only provides a platform for greater visibility, but it often allows a company to demonstrate its capabilities in helping out with the logistical side of global sporting events.
Naresh Chouhan, UK marketing director of international B2B mobile network Truphone, says the company’s partnership with the Caterham Formula 1 team perfectly reflects the positioning of its service: “They personify exactly what an international travelling business does. They travel to 20 different destinations around the world, they have 100 people out there and they need to stay connected back to base and among themselves.”
The sport also attracts people from the right profile for Truphone’s marketing.
“I hate to use the old categorisations, but there are lots of ABC1s aged between 25 and 55, earning relatively high salaries, who would classify themselves as key decision makers in procurement. We know we can get CEOs of large companies to come to a Formula 1 grand prix,” says Chouhan.
Jonathan Becher, chief marketing officer of SAP, says its involvement with sports began as a brand marketing initiative, but has grown into a more strategic business activity. Sport and entertainment are one of SAP’s target industry segments. For example, an application built for American football team the San Francisco 49ers allows the organisation to optimise its strategy for recruiting college players in the NFL draft, thus showcasing SAP’s expertise in analytics and operations.
“This is a direct analogy for HR,” says Becher. “If you think about traditional human resources in a business, mostly what we do is look at the highest test scores, who went to the best university and who has got the best resume. Those are abstract things that may reveal the best candidate overall, but they may not be the best for a department or group or company. If we can learn from sports, so we’re not recruiting the best athlete but the best fit, we start tracking different things. I think that’s what the future HR apps will look like.”