B2B Buyers: Just Consumers at Work?

Most of us make dozens of seemingly irrational or illogical choices every day. Quiet acts of defiance or indulgence or indifference or laziness or just habitual behavior that cost us time and/or money. Why? Because the vast majority of our choices go unexamined or unchallenged. Many consumer brands live off this irrationality. The candy section at the checkout, infomercial weight loss plans, parking in the handicapped lane, a second cookie, another hour of TV, and on and on.

Now what if suddenly all those decisions were suddenly open for review or examination. What if your spouse reviewed all your little irrational decisions and gave you a grade.

"Lets see David, your choice to stop at Starbucks on the way to work vs drinking the free coffee at the office cost you 23 minutes and $3.49. How often do you do this? Twice a week? That's $350 and almost 4o hours a year (a work week!). Do you really think that's a good investment of our money and your time?"

If we came under this scrutiny, it's inevitable that we would start becoming much more rational in our choices. Examination, or the potential for examination, changes the dynamic of the purchase behavior.

I have recently transitioned into B2B marketing. While many of the B2C marketing precepts apply, I am finding the "threat of examination" as a major factor in buying decisions. The potential that you will have to justify your choice to your boss, makes people behave much more rationally. Facts and figures carry extra weight. Emotional appeals carry less. The insight here is not that people behave more rationally in a B2B context...but WHY they behave more rationally.

Does that mean there is no room for emotional benefits in B2B marketing? No. In fact, I would say that there is huge competitive opportunity in most every B2B category in more emotive branding. But it does mean that emotional appeals must be combined with solid functional benefits. And the easier it is for your buyer to "rationally justify" their decision to their boss, the greater your chances for success.

Yes B2B buyers are human, "just consumers at work" and susceptible to many B2C strategies, but don't make the mistake of thinking B2B buyer behavior is identical to B2C. We behave differently when someone is watching or when we fear they might be.

That's what I'm thinking... how about you?

Taking Creative Risk

I'm around a lot of average creative work. Everyday we are bombarded by it. Heavy handed, uninspired, unoriginal. Ineffective at inspiring anything other than maybe blunt awareness and boredom.

Millions and millions spent to create and propel buckets of boring, predictable, quickly forgettable creative work. And it's not just advertising, it's true in music, theatre, film, food, apparel and on. It's mostly the same and it's mostly average. The output of an endless parade of C students copying from each other.

But once in a while I come across creative that stops me. Haunts me. Propels me. Inspires me. Touches me. Why is it so damn rare?

A large part can be forgiven by inexperience and ineptitude. We all start here. But do we have a national shortage in competent marketers, creatives and artists? No. What we have is a shortage of intestinal fortitude.

Every great creative work starts at a point of difference and in that difference lies risk. Risk for the creator, risk for the marketer, risk for the manager, risk for the organization. So we see great creative and rather than nurture it forward and share the risk, we seek to mitigate the risk, to hedge. Great creative is marginalized, muted, ultimately snuffed out...and in its place comes safe, predictable, average work with predictably average results.

When's the last time you saw great creative from a Fortune 500 company? They have the strategy and resources, it's their risk aversion that thwarts them. So rather than step out and try something creative and new, they opt for expected and safe. Rather than demand new ideas, they run to the safety of proven ones. And then they wonder why their brands fail to inspire.

Steve Jobs had equal parts guts to genius. The simplicity and elegance of his design ethic was not his own, but he alone was willing to take the risk to follow the ethic. He made hard choices. He relentlessly prioritized. He refused to straddle, to compromise. He stepped out while others stepped back.

As a marketer, you must embrace the creative risk. You must step forward, because no one else in your organization will. If you don't rally for the work, who will? And at the end of the day, which is the greater risk? Playing it safe or trying for something special?

Be brave.

“Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can't do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”

The Domestic Exchange Rate

As marketers and business leaders, we can't forget that our personal sense of value is typically NOT that of our customers.

Lots of ways to define middle class, here's a another one: One third of households make more than you, one third makes less than you. You're in the Middle Third.

In the US the middle third household makes between $27K and $69K annually. Typically these are the folks we serve. Business decision makers typically live in the upper third...which means they have household income above $69k.

Let's consider this. If you are smack dab in the middle of the middle class (50 percentile) you have household income of $43k annually. If you are in the middle of the upper third (83rd percentile) you have household income of $110k annually, more than double, almost triple the middle class example. Still with me?

In this example, if the upper class family buys an $11k car, it consumes 10% of their income. That's a large percent, but think about the middle class family. An $11k car consumes over 25% of their income. The price of the car is absolute, the "relative or perceived cost" of the car to the two families is significantly different.

In this manner, every purchase is relatively more costly to the middle class family.

So as we sit in the upper third and make pricing decisions for the middle third... we must do the "relative currency" translation. To understand the perception of the price increase by our customer, we must translate it into our value frame. In relative terms, adding $1 in price to a garment for the average middle class family has the relative cost effect (or perception) of increasing the price $2.50 for the average upper third family.

And the lower third? The middle of the lower third (17 percentile) has an average household income of $15k per year. That means the "middle of the upper third" identified above, makes over 7 times more per year. Adding $1 dollar in price to a garment for the average lower third family will feel like a $7 increase in upper class terms. Ouch.

As marketers and business leaders, we can't forget that our personal sense of value is typically NOT that of our customers. $1 is just not a $1.

Day Old News

What if you got your news twice a year? Four times? How about eight?
What if you hadn't heard the news in two years? What if you had never heard the news? How confident would you be about your knowledge of current events?

Then why do you think you can make intelligent business decisions if you rarely meet with distributors (customers) or consumers?

Go ahead, get out there. Recency matters in the news and in business.

If Not Us..

Below is a speech to Congress from then President Reagan.

All of us came here because we knew the country couldn’t go on the way it was going. So it falls to all of us to take action. We have to ask ourselves if we do nothing, where does all of this end. Can anyone here say that if we can’t do it, someone down the road can do it, and if no one does it, what happens to the country? All of us know the economy would face an eventual collapse. I know it’s a hell of a challenge, but ask yourselves if not us, who, if not now, when?

While President Reagan was addressing a separate issue, I suggest the logic holds for most businesses... everyday. We all face tough strategic choices that impact the history of our organizations ...everyday. It's just human nature to postpone those choices. To delay. To defer. To squeak by another quarter. To let someone else face the risk of an opinion; of making the wrong decision. Let someone else figure it out.

We act as if leadership is about "letting it ride" for another quarter without embarking on the journey of much needed change. You know what I'm talking about. Every business I have ever worked in was facing the need for significant change, yet delaying the inevitable. Delaying the future because they fear it will be worse than the present. I bet you can name one in your business. The elephant no one talks about.

Leaders lead, managers manage. Leaders take us somewhere, managers maintain.

Is your team dealing with one of those issues? Remember Reagan's challenge: If not us, who? If not now, when?

It's about courage, determination and faith. Ships are safe at harbor, but that's not what they are built for.

Getting off the soapbox now. Thanks for listening.

Things I Want To Learn About

This one's kind of random, but there is no cost of admission.

• Innovation. Not the why or what, but the how. How do I spur more innovation in my work, and across my organization. Focus on the skills, not the output.


• Design. Innovation is a tool of design, but design is the higher discipline. Design is the intersection of efficiency and desire. What's this all about? How can we leverage in our work?


• Sustainability. How do we turn the corner from idealism to realism in bringing sustainability into our workplace. Common sense, shareholder friendly sustainability at a corporate level.


• Economics. How can we use economic models and approaches to enhance strategy development. They get cause and effect, macro thinking.


• Insights. Beyond research and understanding. Consumer insights are the strategic nuggets, the intuitive leaps that enable us to step ahead. They are why we do research. Need innovation here, new approaches, techniques. Design thinking is an example, but I suspect it is no longer the edge.


• Collaboration. In highly specialized work environments it is essential. What do we know about current thinking on collaboration? What blocks it? What encourages it?


• Advocacy. Digital platforms are just that, platforms that enable new ways of interacting with current and potential consumers. Just like TV was in the 40's. I think we're past the "understand the platform stage"...we need to jump to the end game. What do we use them for? One key objective is to leverage the inherent viral nature of digital to drive brand advocacy. What do we know about advocacy in general, word of mouth theory, best in class examples. What can we learn from politics?


• Crowdsourcing. From product design to customer service to customer experience there are lots of applications, but how do we get there? Is this a tool for internal use also?


• Community Building. Building an authentic, brand-centric community is kind of the holy grail. Not talking about getting likes on facebook or follows on twitter. Talking about brand as the catalyst for user relationship, conversation, social interdependence, personal identity, brand as a movement. Apple, Starbucks, NFL, Tea Party. Can we bring any of this thinking to bear on our categories?

So what do you want to learn about?

Essential Work

Recently my boss asked me for my 2012 goals. I jotted down a long list and then set about some criteria for narrowing them down. Thought you might find helpful...

1. What Matters? Of all the things you could do to fill your calendar, what are the few things that truly matter. Things that will drive the business ahead when accomplished. (In my experience, these should be directly linked to growing revenue or profit.)


2. What Can Only I Do? What are the things that only I have sole responsibility for? If I don't do them, they won't get done. (Hey, do they matter?)


3. What Will Likely Not Happen Unless I Engage? What are the important initiatives in your organization that need leadership, need a champion, need someone to embrace and own. If you don't step up (or someone), they will likely still be stuck a year from now. (These will likely be a lot of work, I'd suggest you be passionate about them and don't take on too many)


4. What Can I Do That Will Make Me More Effective in 6 Months? A year from now is too far away, 90 days seems to short, but 6 months is enough time to make significant progress at some self improvement idea. (Time management skills? Digital competency? Education? Healthier lifestyle? Community involvement? Team building? Mentoring/coaching? Reading list?)


5. How Much Can I Reasonably Do and Still Find Some Balance? First, be realistic in what you can get done. Accomplishing things usually results from focus. That said, you also have to make time for a healthy life beyond work. Every study points to the reality that all work and no play leads to dull work and low pay. (In the long run, quality trumps quantity and you have to recharge to produce quality work. It's an age old trap for the ambitious.)

We all get distracted and pulled into non-essential work, but it's the essential work that defines our careers. What boss can argue with a focusing and accomplishing essential projects that move the business ahead in leaps?

What do you think?