B2B manufacturers are a diverse group. These companies exist throughout the world, producing goods for local markets like automotive parts, pharmaceuticals, and appliances. Then there are those dealing in regional processing like food and beverage products, printing, plastics, and more. Next, you have your energy companies and technology innovators, and labor-intensive trades that produce textiles, furniture, etc. Yes, these are big sectors that do a lot of business. That begs the question, then, that if B2B companies are so dynamic, why are they mostly relying on 20th-century sales strategies rather than modern marketing techniques? Below we look at three crucial things B2C companies are doing well that manufacturers can take inspiration from.
There are fundamental differences in how B2Cs and B2Bs go about acquiring customers. Before we delve into this topic deeper, consider this stat: as recently as 2015 only 8% of manufacturers had a dedicated marketing team. That means manufacturers are still often relying on referrals to land big clients. And while this is a time-tested strategy, referrals alone aren’t going to cut it in today’s dynamic, multi-channel world. This leads us to the next point: While B2Cs get a majority of their revenue from new customers, B2Bs derive it mostly from existing customers. This has always been the safe play for B2B companies (hence the paltry marketing budgets for most manufacturing companies), but it also leaves a lot of potential revenue on the table. The key here is balance—finding a balance between generating revenue from both new and existing customers. And if manufacturers increase their marketing budgets they’ll be better positioned to find that balance, which in turn leads to greater revenue. That isn’t to say a manufacturing company needs to focus predominantly on new customer acquisition. This is a behavior that plagues many B2C companies and it leads to them becoming too dependent on acquiring new customers. It often reaches the point that if they stop searching, even for a short time, the whole business suffers. Instead, manufacturing companies should focus on some simple tactics to help round out their customer acquisition strategy. So rather than waiting for referrals to bear fruit, invest in some inbound strategies that are so effective in the digital world, like SEO, social media, and content marketing. Also, manufacturers can improve the onboarding experience B2C style by cross-selling with the help of an affinity model (more on this below).
Affinity analysis is a type of data analysis in which marketers look at a broad range of analytics in order to quantify the association between two items. Simply put, it’s Amazon’s “people who bought this product also bought…” recommendation engine. And it works like a dream. Consider the fact that Amazon not only reports yearly sales increases of billions of dollars but that 35% of their total revenue is generated from its product recommendation engine alone. What this means for manufacturers is that they need to start looking at the products their clients are ordering and start adhering to that age-old B2C marketing strategy of cross-selling. There’s no reason B2Bs should be under-utilizing this tactic. After all, they’re in prime position to leverage cross-selling for greater profits: manufacturers know their customers, and they already have the good transaction data necessary to build a solid affinity model. A table like this combined with customer-level analytics will give B2B marketers the tools they need to make tailored recommendations to existing customers.
Because B2C companies are always on the hunt for new customers, they rely heavily on segmentation. Most effective marketing operations take all kinds of data into account, including purchasing patterns and especially demographics. B2B companies have traditionally eschewed relying on customer profiles into account for one simple reason: the typical B2B customer is a business, not a person. Except in today’s digital age, businesses are people, and B2B buyers are following similar paths down the purchase cycle as your typical B2C customer. For example, if there’s a business that’s interested in working with a new manufacturer, and they don’t have a referral, that buyer is likely going to begin with an online search. This is no different than any other B2C consumer. So how should manufacturers create customer profiles and segment their target audience? The first step is to create segments based on existing customers’ behavior. Who is buying what and in what quantity? Have any clients fallen into the inactive list? Narrow that down and then you can tailor personalized messages to existing customers. You can also implement more advanced strategies, like tracking customer migration patterns and setting up marketing initiatives, like one-time buyer programs, that trigger when a customer displays certain behavior.
B2B and B2C companies will always be different entities, and thus not all recipes will work in each other’s kitchens. That said, the landscape of consumerism has changed so much with the advent of digital that manufacturers will need to adopt some B2C strategies in order to compete in an ever-more connected world. Ready to modernize your B2B manufacturing strategy? Find out how we can help.
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About the author:
Scott is the president of Elevation Marketing. He is a balanced risk-taker with nearly three decades of experience starting and growing advertising and marketing agencies. His business acumen is matched with a drive to build creative teams that thrive in open, collaborative work environments. Scott seeks out the best creative individuals, not only to provide quality service to clients but to also help shape the future direction of Elevation Marketing.