B2B companies have the comparative luxury of responding to trends rather than seeking to predict or even drive them. B2B Buyers Are Longer-Term BuyersWhilst consumers do buy items such as houses and cars which are long-term purchases, these incidences are relatively rare. A service-focused segment, which has high requirements in terms of product quality and range, but also in terms of aftersales, delivery, etc . These companies tend to work in time-critical industries and can be small, medium or large. A quality and brand-focused segment, which wants the best possible product and is prepared to pay for it. Companies in this segment often work to high margins, are medium-sized or large, and regard the product/service as of high strategic importance.
Resources are far better directed towards developing relationships and expertise. B2B Markets Drive Innovation Less Than Consumer MarketsA look at the derived demand diagram demonstrates that most innovation is driven by consumer markets. B2B companies that innovate usually do so as a response to an innovation that has already happened further upstream. B2C businesses tend to be less risk averse, as they have to predict and respond to the whims and irrational behavior of consumers rather than the more calculated decision-making of businesses.
Low-value, high-risk items such as office insurance would similarly involve a mixture of specialists and purchasers. This complexity and dynamism has implications for business-to-business markets.
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A price-focused segment, which has a transactional outlook to doing business and does not seek any ‘extras’. Companies in this segment are often small, working to low margins and regard the product/service in question as of low strategic importance to their business. The main reason for the smaller number of segments, however , is simply that a business audience’s behavior or needs vary less than that of a consumer audience. Whims, insecurities, indulgences and so on are far less likely to come to the buyer’s mind when the purchase is for a place of work rather than for oneself or a close family member. B2B Products Are Often More ComplexJust as the decision making unit is usually complex in business-to-business markets, so too are B2B products themselves. We therefore have a tendency to make purchasing decisions that a rational observer (a business-to-business buyer that has to make a profit each month) would regard as ludicrous. As consumers we are far less likely to ask whether the product we are buying has an ROI.
I love helping people figure out what they deep down want. Money is generally the first challenge, so we start there by creating viable sources of income. The implications for business-to-business marketers are clear – packaging, like product, plays a primarily functional role.
I’m a huge fan of lifestyle design and I actually live it! Together with my wife & 3 children, we’ve lived in Cozumel, Mexico, Edinburgh, Scotland, Spain, and more. I run my business from my laptop from literally anywhere with an internet connection. While becoming a lifestyle entrepreneur isn’t right for everyone, I deeply believe that life should be more than commuting, cubicles, and weekend trips to Costco.