B2B OR B2C? Potato or Potato?

Up until the 1990’s, B2B advertising used to be called industrial advertising. The discipline focused on vertical industries that have generally seen less competition, meaning the target audience was less concerned with price. Traditionally, B2B marketing belonged in the hands of sales who were responsible for finding, nurturing, and educating their prospects. My guess is that this was also the reason why B2B companies in the 80s and 90s usually had VPs of Sales and Marketing. Not separate CMOs and CROs.

When I first started working in B2B back in the late 90’s, our biggest deliverable each and every year was the product catalog. Depending on the size of the company, we had to lay out a 200-page beast, write copy, shoot the products (hello, ergonomic jackhammers and drinking fountains) and then – we print and send it to customers and reps. When we weren’t working on catalogs, we went to trade shows, which were filled with product brochures and, you guessed it – catalogs. There were trade publications for everything under the sun and the advertisers kept these going with annual buys. People didn’t google something when they needed something, even for offices. They went to the trades!

But time moved on and in the late 90s, we not only got better computers (aww… iMac), we also got the internet for everything. I can recall working with a start-up in the early 2000’s who had the revolutionary idea of creating a marketplace – a kind of yahoo for builders and designers to source materials from. But as we all got used to living digitally, the catalog started to seem more and more outdated. I’m sure there were many catalogs that lived longer but the last one I can remember working on was printed in 2002.

Over time, Amazon trained humans in how to interact with websites. And all of a sudden in the late teens, B2B realized that much of what we were doing in the real world could be better and more efficiently executed digitally. And thus the B2B trend to create better UX experiences was born. Shortly after that, we were introduced to marketing automation that tracked what we were doing.

The B2B landscape has changed substantially. We’ve seen the rise of CROs and lately, we’ve even had hints of a full-cycle movement with the elimination of CMO roles. Even with the rise of the subscription economy, B2B purchases on average have a higher per unit cost. Even though the B2B market places seem crowded, we still face less competition in B2B than we do in B2C.

In the “traditional” (B2C) advertising world, the history of advertising goes back thousands of years to the papyrus writers of ancient times. But we really saw advertising rise in importance post-WW2 when we entered into a previously unmatched consumerist era. Production methods changed and markets across the world were flooded with products. Now, we had a real need to differentiate what we were selling. You no longer had to pick from one toothpaste, instead you had to pick amongst whitening, strengthening, brightening, minty, gentle and so forth. This was the golden era of Ogilvy and JWT. This is when advertising campaigns officially impacted business strategies and bottom lines. Companies were saved – and sold – based on the success of creative campaigns.

The purpose of B2C advertising is to differentiate, to make your product stand out. The brand becomes important as it becomes something your consumers can trust and look out for. They know what to expect. But “traditional” advertising has also had to go through a transformation. As consumers have more choice and access to more information, standing out is no longer enough. Consumers today want to spend their money with companies that match their values and identities. It’s no longer enough to just be the best tasting chocolate but does the chocolate manufacturer treat their employees in a manner that you can support?

While B2B and B2C advertising at the core are about selling products and services by making the target audience remember your brand when the time is right, how they go about it is different enough to justify specialized agencies.

The majority of the time, the total investment involved in B2B is much higher than that in B2C. A real life example would be buying toothpaste – get something you don’t like, no big deal. You can buy something different next time. In B2B, if you buy the wrong ERP system for your department, it’s a huge expense and could be potentially career ending. In other words, it’s not just the costs that are higher in B2B, it’s also the stakes.

To counter that, people tend to buy B2B products differently. In order to diffuse the blame and not be the only one responsible for a potentially devastating decision, you have purchasing committees making joint decisions. If what you sell impacts the IT department, you’ll have people involved in the purchasing process who need to check the tech and make sure it’s safe. You might have someone from Operations and someone from HR if implementation looks like it might span departments. Therefore, as B2B marketers, we have to have a story and a message for each of these decision makers, which adds to the complexity of B2B marketing.

The committees and the high price tags lead to two different behaviors in B2B. Firstly, we tend to have longer sales cycles. Purchasers will need time to weigh the different options, meet with the committees and make sure they’ve done all the demos. Given the high stakes, they need to ensure they’ve done their due-diligence, if nothing else to cover their ass if things end up badly.

Secondly, and as a result, this then means the B2B audiences have a higher need and desire to educate themselves. According to research conducted by Google and CEB, the average B2B buyers are 57% of the way through their research before engaging with a sales rep. In other words, marketing today has taken over a lot of that educational work that used to fall on Sales. This means that the work of marketing and agencies in the B2B world has to be focused on educating our potential buyers and providing the right materials at the right phase of the nurture process.

That is not to say that the B2B sales process is rational. In fact, research by HBR indicates that “B2B customers prefer interactions that fuel their psychological needs — even if they require more time or cost more money…” In other words, humans apparently act anything but rational in their professional lives. Without having research to back it up, I would go out on a limb and say that people at work often make a decision based on their emotions and then use research and stats to justify that decision. What does that mean for B2B agencies and marketeers? I think we can learn from the B2C world here that not everything is about speeds and feeds or as rational as we expect. And to ensure that we make sure we communicate in a memorable way.

In the B2B world, it’s important to evoke the right emotions, and not just emotions for the sake of emotions. Given how high the stakes are in B2B, the emotion that we most often look to create is security. We’re looking to emotionally convince our buyer’s that we help them minimize risks. The saying back in the day that nobody ever got fired from buying IBM still stands today. We want to ensure a sense of security, of low risk. And at most a bit of FOMO.

The argument for not needing a B2B-specialized agency is that B2C agencies sell a lot of different products. The sales cycle for a car is obviously longer, the price tag is higher and it requires more education than buying a yogurt. Yet, the same agency, and sometimes the same team, can successfully work on those different products. So why couldn’t they work on B2B as well!?

Technically, they probably could. Especially more straightforward products, perhaps like manufacturing machines or back to the old jackhammers. But where it gets tricky is specifically in the enterprise tech world… most of what we do requires understanding the industry and our knowledge builds on other products. Most products and services we deal with are so complicated that it can take several weeks to just understand what they do. Having prior experience from the segment helps that understanding and helps us communicate the essence of what we’re selling without missing any important pieces.

In addition, there’s something to be said for speaking the same language. When we work with clients, we recognize their issues. That they have product-led organizations or CEOs that have had no prior exposure to marketing. That what they need to deliver is MQLs or pipeline and that the relationship with sales can sometimes be sticky. That the traditional split between sales activation and brand tends to be different in B2B. Having worked with more than 150 tech companies means we can advise and have opinions based on what has worked for similar clients in the past. It means we also understand the target audience and what happens inside Enterprise IT. More than anything, there’s so much communication that doesn’t have to be explained when you’re starting from the same point of understanding.

Explore more about B2B marketing and how we build brave B2B brands.