Business-to-business (B2B) companies are moving away from price-led marketing in favour of a value-led approach that puts greater focus on the customer experience, new research suggests. It reveals that retaining customers and growing brand awareness are mounting challenges for B2B businesses, but that many marketers are struggling to adapt to the pace of change.
The survey of senior marketers at more than 250 global B2B firms, conducted by market research group B2B International, finds that 58% are focused on ‘value marketing’ – up significantly from 39% in last year’s study. This refers to an insight-driven approach to marketing whereby companies sell products and services based on the value they offer to a particular segments of customers.
“Many B2B brands are guilty of selling on price, rather than selling on value,” explains Julia Cupman, global director at B2B International. “Value marketing means that you might not be the cheapest on the market but you’re better at meeting different groups of customer needs.”
This heightened focus on value reflects the difficulty of keeping hold of customers within the B2B world. Over half (54%) of respondents say that customer retention is one of their top five challenges, up from 44% last year, while building market share is the biggest challenge, which is cited by 62%.
Despite these pressures, only 14% of B2B marketers say that the customer experience is ‘ingrained in the fabric’ of their company. A breakdown of this result by country shows that the UK does not fare much better that the global average, with only 15% of domestic marketers agreeing with this statement. This puts it slightly ahead of the European average of 13%.
Around a third (31%) of global B2B marketers agree that the customer experience is at least a ‘core piece’ of their firm’s strategy, but only 19% state that executives in their company are actively involved in shaping the customer experience.
Cupman argues that it is becoming more difficult for B2B firms to meet customer needs given the huge array of potential touchpoints and customers’ changing expectations. Ten years ago, companies primarily looked at customer satisfaction surveys and their net promoter scores, she says, but the scope for understanding the customer has grown much wider. “There’s a much more holistic view of the customer experience now – it’s not just about customer satisfaction and loyalty, it’s more about how you can deliver a superior experience to your competitors,” suggests Cupman.
This insight challenge could explain why more than half of respondents (54%) believe customer experience research will be the most valuable form of market research over the next two years, while 37% say the same for customer segmentation, up from 33% last year.
Interestingly, only 39% say they will prioritise competitor research, down sharply from 53% last year. This suggests that as B2B firms increasingly turn their sights on their customers, they may reduce their investments in researching rivals.
“Many companies can become too obsessed with the competition and not focus enough on what makes their brand unique,” says Cupman. “Competitor research is important, but it’s also essential to get right what your brand stands for, how it is distinctive and differentiated, and what the market values in your brand and offering, and push that.”
Nearly half (46%) of respondents cite ‘growing brand awareness’ as one of their top five challenges, up from 36% last year. However, only 54% say they have a programme in place for measuring the market’s perception of their brand.
That figure falls to 45% for UK firms and 37% for global companies with less than 1,000 employees. Large corporates are significantly more likely to measure brand perception, as 75% of firms with 50,000 people or more confirm they have a brand measurement programme in place.
However, B2B marketers across all company sizes tend to have a limited view of their brand’s strength. When asked to rate their business’s unique selling point out of 10, the average score across all respondents is 6.3. There is little difference between marketers who work for firms with less than 1,000 employees (who give their brands an average score of 6.3), and those who work for firms with more than 50,000 employees (6.2).
B2B companies could improve their brand differentiation by rethinking their approach to communications. The study shows that trade magazines and journals remain the most popular communications channel, used by 85% of B2B marketers. This is followed by trade shows and conferences (81%), LinkedIn (77%), industry-specific online communities (75%) and supplier websites (74%).
Cupman believes that many B2B firms have rediscovered the value of traditional platforms after experimenting with digital media. She notes that some B2B marketers have followed their counterparts in the consumer world by investing heavily in social media, but that such campaigns are not always appropriate for B2B.
“Your typical B2B brand might only have a few hundred customers, so trying to engage that small number through social media might not be the most appropriate option for reaching and engaging them – it might need a more traditional channel,” she says. “That doesn’t mean social media isn’t important, but traditional media shouldn’t be neglected either.”