We just sent out a summary to the participants of this year’s Industry Specialization by B2B Vendors Benchmark Study. We had a record 120 B2B companies take part in this year’s study.
Companies see that greater customer focus, in the form of industry-specialized sales, marketing, services, and products will enable them to access more senior decision makers and increase deal sizes. Many are also responding to competitive pressures. The good news is that the investment is paying off.
The full report is due out next month, but meanwhile, a sneak peak at a few tidbits:
- 67% of B2B companies that already have some amount of industry specialization said they plan to further increase their focus on key vertical markets.
- It takes two to three years to begin to realize the full benefits of specialization.
- After 2 years, 70% of companies reported notable or significant impact on revenue from their investments in industry-specialized activity
- Industry alliances have a big impact on brand awareness
- Industry-specific case studies and quantitative ROI analysis were reported to be the most valuable industry-specific marketing tactics. Sales and marketing brochures were least effective.
by Lilia Shirman on June 26, 2009
in Marketing
Relevance – to your buyer’s company, industry, role, current business objectives and challenges, and personal interests.
Value – tangible value that specifically and directly links what you’re selling to what the customer wants. Value is the intersection of results you have proved you can deliver, and the results the customer is looking for.
Uniqueness – Your secret sauce. That thing that only you can deliver, or for which you are known as the best or the vanguard.
Given that segmentation is the cornerstone of marketing, I am often surprised at how little of it B-to-B companies actually do. Company size and geography are often the only criteria for segmentation, with industry being a distant third. There are other ways to slice and dice. A few ideas:
1. Look at customer characteristics such as tolerance for risk, speed of technology adoption, core business driver (are they technology-driven, customer-driven, supply-chain driven, etc.) – some may be much more likely to buy from you than others.
2. Separate customers with different levels of familiarity and experience with your company and products – your objectives and sales approach will be very different.
3. Split companies up by specific situations, business processes, or use-cases that are common to an industry or a business models. The solutions and services you offer them will vary drastically.
4. Define audiences based on their roles and responsibilities within an organization or within the decision-making process. Also consider segmenting by organization structure and culture – highly hierarchical, process-focused companies need a different sale then flat and agile organizations.
5. This seems painfully obvious, but then again, its rarely done: Segment based on actual customer objectives. This one is difficult and takes account-specific research to determine who fits where. So we tend to just assume that all companies in an industry, experiencing the same pressures (you know, the slide that says “Increased competition, Decreasing customer loyalty / ease of switching, regulation and/or deregulation, growing complexity of IT environment..”) must have the same objectives. But in fact, some are looking to get bought, some want to grow internationally, some want to raise revenue from existing customers, while other are focused on boosting profitability.
Most companies also under-utilize the insights that segmentation provies. Next time we’ll explore the uses of segment characteristics in various parts of your organization.
Comment and share some innovative segmentation criteria you’ve seen used by BtoB companies.
What advice would you give small companies trying to prioritize target industries? Robbie Baxter of Peninsula Strategies, an expert in on-line, recurring revenue streams, asked me a this very interesting question!
At companies with a sales history, industry-specific activity and resources are focused in two kinds of areas: Where most revenue is coming from already (this is by far the more common focus area), and where there is greatest opportunity for growth in the future. There can be lots of complex analysis, but in reality few big companies do much proactive planning. That’s a whole other blog, though.
With a smaller company, the first part of that equation is missing. They don’t have the sales history, references, and channels to naturally leverage into an already-active vertical market.
So, here is a try at some things I’d look at as a small business deciding where to focus.
1. What industry will value what you do most? Where will you impact mission-critical results?
2. Over time, what group of customers are going to be needing you more and more (and feeling increasing pain you can solve) due to external pressures and trends in their industry?
3. Where are you best able to access the financial decision-makers? (This is a combination of your company’s existing connections and lists, and the target industry’s propensity for doing business with small companies.)
Note that its easier to find ways to reach financial decision-makers than to change the core value of what you do or convince an industry to focus on non-critical issues. Unfortunately, many small companies start with #3 as the first, not last criteria for selecting target markets.
Please comment with your own thoughts on selecting target industries at small companies.
After 2 days at the Sales 2.0 conference, I fear we may be on the same path CRM took in its early days. Though some of the new tools are great, and MUCH easier to adopt, there is too much talk of technology, not enough about behavior and cultural changes. All things 2.0 are really about interaction and collaboration with customers. And that requires a change in mindset.
Basic example of 2.0 principles in action, that actually requires less technology. (A version of this focused on customer references was used very successfully by Beverly Chase and the BEA marketing team)
Instead of arming your reps with the new and improved power point presentation, design a white board talk. Script it with questions and discussion points instead of spiel. The result is a conversation where customers contribute ideas, and the content evolves based on the here-and-now in the room, and not what marketing thought up a month ago back at corporate.
More ideas on cultivating customer contribution and creating opportunities for interaction by turning traditional marketing into Marketing 2.0
6. In-person events – These are expensive to put on, so why spend the entire time lecturing on information that’s already in your collateral? Third party presenters can be more interesting, but any lecture can get dreary fast. Give attendees lots of time to interact with you and with each other, while you listens and takes notes. Consider a workshop rather than presentation format so that the entire event is interactive.
7. Trade Shows – This seems like a highly interactive event, but most booth staffers are so focused on doing the demos and spewing the spiel, that the opportunity to listen is lost. (I adore alliteration.) To change the mindset, make it clear you’re at the show to interact with and listen to customers, not just to be seen and heard. Set objectives of specific information you want to gather from booth visitors or people attending your sessions. Ask a few questions or give a short (5 questions max) survey before handing out the tchachkis, or organize mixers and events that have information gathering as an explicit objective.
If a widely open a conversation seems too much of leap, try these by first letting a small group of customers you know well contribute and participate, then open further when you’re comfortable managing a broader conversation.
Have you tried these or other ways to engage customers in conversations? Share them in your comment!
Read More
Turning Marketing into Conversations – Part 2
Turning Marketing into Conversations – Part 1
