How B2B Product Marketing is Different from B2C

05/26/2011

I read a great post from Gopal Shenoy this week about how B2C product marketing is different from B2B. I’m a B2B marketer so that got me thinking about writing a post in the reverse.

Here’s how I think B2B product marketing is different from B2C

1/ Channels are important (sometimes critical) – Most B2C companies sell direct. B2B is often through channels or a mix of channel and direct. The channels can be single or multi-tier and you will need to figure out how to price for these channels, enable and train them, incent them and ensure that there is as little channel conflict as possible. This is not easy.

2/ Long term customer relationships – Many B2C companies talk about “building customer relationships” like it’s a new thing and that’s because for many B2C companies it is (with the exception of SaaS-based B2C services where churn is a major metric). On the B2B side, there are fewer customers and often you will live or die by your long-term relationship with that customer. That means you will often have dedicated teams assigned to larger accounts.

3/ Tiered customer service – Because those long-term relationships are important, customer services becomes absolutely critical. Of course service is important on the B2C side as well, you don’t often see differences in the way you serve customers. On the B2B side there is quite often a massive difference in the way you service a very large account vs. a very small one.

4/ Purchasing teams – For larger-ticket items there will be a number of people and groups involved in a purchase decision including business leaders, IT, purchasing, legal, etc. Closing a deal often means working it across all of these different functions who often have very different requirements.

5/ Users vs. Buyers – This is a big one and in my opinion the reason why so much Enterprise software sucks as far as the user experience goes. Often users have little say the purchase process of enterprise systems. This is particularly true when the sale is IT-driven. As a result, factors such as how well a system integrates with the current IT environment are often much more important purchase drivers than how difficult a product is to use.  Yeah, for some functions users are starting to bring consumer services into the environment without going through IT but that’s still more the exception than the rule today.

6/ Deals are almost always competitive – Most companies have rules around putting projects out for bid if they are larger than a certain size so for big deals you will almost always be in some sort of a bake-off against a competitor. Your ability to stack up against them on a feature by feature basis makes a difference and how well you can roll out and execute a proof of concept will be important too.

7/ Longer sales cycles with distinct stages – Nobody goes online and whips out their credit card to buy a million bucks worth of accounting software (not now anyway). The cycles are long and the sales and marketing support required at each step of the deal is distinct and needs to serve the function of getting the prospect over the hurdle to the next stage of the deal.

8/ Sales Costs are High – Big deals are great when you close them but they don’t close quickly. You are often going to have to invest a ton of time and energy getting a big deal to the final stages including some sort of proof of concept that you may or may not get paid for. If you close the deal, it was all worth it, if you don’t, well, you better hope you are working on more than one deal.

9/ Politics can be a major factor – Anyone who has sold large enterprise deals will have a set of horror stories about how a new CIO came in a replaced a bunch of perfectly good systems with new stuff because “he was an Oracle guy.” CIO’s are risk adverse (they tend to get fired pretty quickly if things don’t work) and they tend to work with the same vendors over and over again. Sometimes they are pals with the vendors or get rewarded by those vendors for being such a loyal customer. There’s a lot of golf being played for a reason.

There are probably 100 other things but you get the idea. Did I miss any big ones? What do you think?