Dealing with other businesses requires a different approach to the consumer market. It’s not an easy transition, but MIKE PRESTON has divined the secrets to success from Australia’s experts.
By Mike Preston
Dealing with other businesses requires a different approach to the consumer market. It’s not an easy transition, but we have divined the secrets to success from Australia’s experts.
There are almost two million businesses in Australia, and each one is a potential customer – if you know how to sell to them.
Successfully marketing and selling to business requires a specialised set of skills and strategies. Simply applying consumer sales strategies in the business-to-business context will not produce results. Because small and medium sized business owners and managers are generally incredibly busy and cost-conscious, a poorly tailored marketing message or ill informed sales pitch will quickly put them off-side.
But patience and a marketing and sales strategy that hits the right buttons can mean snaring business customers that will stick with you for the long haul – and often without the need for expensive mass market advertising.
Fortunately, there is no need to reinvent the wheel. Experienced sales and marketing gurus and high-performing businesses in the B2B space shared their top 10 secrets to successful B2B selling with SmartCompany.
There is no such thing as the B2B market; in fact, it is a general label to describe hundreds of markets, each with their own particular requirements and selling points. If there is one consistent message that successful B2B sellers repeat, it is that business customers respond best to a sales pitch that is tailored as much a possible to their circumstances.
A sales and marketing strategy pitched at the general B2B market will be hopelessly irrelevant to individual businesses. To be worthwhile, a strategy must be built on a careful, well-researched segmentation of the market.
How you break down the market depends very much on what is being sold and the value propositions it presents to business customers.
For example, financial software firm MYOB divides up its market based on the capacity of the businesses; a sole trader will do their books very differently to a small business with their own bookkeeper.
By contrast, asset management software company SmartPath starts with the five or six industry categories (often referred to as “vertical” segments) that it tends to do the most business in, and then looks not to the size of the business but to the number and variety of assets they deal with.
Business IT firm Brennan IT takes a more conventional approach, with its market broken down first by location, then business size, and finally by industry.
Other lines markets can be divided along include age, income, political or cultural beliefs and buying behaviour – in the technology space, for example, identifying early adopters can be important.
A sales and marketing strategy that is not adapted to the different needs of small and medium sized businesses and the big corporates will be unlikely to be successful with either.
This is true for a range of reasons, not the least of which being that small and medium sized businesses hate being treated as second-class citizens. A marketing message that gives the impression it was tailored for a corporate audience sends a clear and negative message to the business owner – “expect to be treated like a second-class customer”.
More practically, often the small to medium sized business will use a product or service very differently from a larger corporation. MYOB is the classic example of a company that appreciates that size matters – its market break-down goes way beyond large, medium and small business to capture a wide range of finer organisational distinctions.
“Our products work across a wide range of vertical segments, but for us it’s the size and structure of a business that makes a huge amount of difference,” chief executive Tim Reed says. “It’s things like whether they have specialised staff or is the business owner doing everything? Do they have section managers or a payroll person? Every business is different, but those things tell us a huge amount about the types of solutions we need to take to them.”
That information is valuable to MYOB because this tells it how and by who its software is likely to be used. But it is also significant in terms of identifying relevant purchasing decision makers and influencers for marketing purposes.
The style of marketing and sales information the small and medium sized businesses tend to be most responsive too also differs. Technical information on performance may impress a specialist in a large business, but business owners – who are often forced to be a jack-of-all-trades – may respond better to testimonial information.
The reason? Small and medium sized businesses tend to be risk averse. If they are going to invest in a product or service, reassurance that it has worked for other businesses will often go further than an impressive list of whiz-bang specs.
Many businesses design training programs to ensure their staff are thoroughly conversant with their product or service range’s features and advantages. When selling B2B, however, this is just the beginning.
Sue Barrett, principal of Barrett sales consultancy, says the more important skill a B2B sales person must have is the ability to understand their customer’s business.
In the business-to-customer context, the pitch tends to come first. But Barrett says successful B2B sales people understand that they can only make a strong pitch once they have a strong grasp of what the potential client’s business does and where it is going.
“You need a better quality of skill in B2B sales,” Barrett says. “They need to know how to think, not just what to think, so they can engage in a meaningful dialogue about the future of a business. Just flogging a product won’t get you very far.”
Business clients will expect sales staff to have the business literacy and commercial awareness to engage in this strategic dialogue with them. This will often require more resources to be put into training than would usually be the case.
It also means suppressing the natural instinct of many sales people to let their passion for what they are selling drive their interactions with clients.
Entity Solutions chief executive Matthew Franceschini says his organisation tries to train sales staff not to let their passion for what they are selling prevent them from listening to and focusing on their clients’ needs.
“We tell our sales staff that they have two ears and one mouth and they should be used in those proportions. You may have an opinion on the product and what it can do, but it is irrelevant – it is the client’s opinion that counts,” he says.
The good news for small and medium sized business owners is that their experience in running their own business means they will often be in a good position to sell effectively to similarly sized firms. Barrett advises business owners not to be afraid to bring their own experiences to the sales process.
Once you have spent time learning about your client’s vision for their business, the next step is to think about the role your product or service can play in that vision.
This is the essence of building a value proposition around what you sell – seeing how your product or service can help the client achieve their vision more quickly, cheaply or importantly than they could without it.
This is easier said than done – particularly where you are trying to spread limited sales and marketing resources across a large number of small potential clients. But Brennan IT sales and marketing general manager Stephen Sims says a tailored solution for each client still has to be the goal.
“One of the key things we and others do is to understand your market and have a very clear value proposition, ideally per client. We have all been guilty of coming up with a generic statement to market hoping to gain traction, but it won’t get that if it’s not specific, so per client has to be the goal,” Sims says.
“One-to-one marketing is the ideal. It will usually be impossible to do that, but to get as close as possible you need to craft a value proposition around solid information about the company and then have sales staff tailor it further to a particular client,” he says.
One mistake to avoid is taking a scatter-gun approach. The temptation, especially for marketers with a mass consumer market product sales background, is to try and communicate the full range of product and sales options to potential clients in the hope that one will hit a hot spot.
But this is inconsistent with the tailored, one-on-one approach that is most likely to work in B2B. Instead, identify one or two products that are most likely to be useful and focus on them. If they are embraced by the client, further products can be introduced down the track if appropriate.
To make things a bit easier, use research and your anecdotal experience to identify the issues and products or services that will tend to be relevant to clients. For example, Entity Solutions sells administrative services to independent contractors and placement/recruitment services to big corporates. In each case, CEO Franceschini says, the company has a firm idea of the kind of needs they will be addressing.
“We know the big corporates are focused on compliance, so for them our approach is all about peace of mind and credibility on statutory compliance. For the independent contractors administrative convenience is the issue and so for them the message is structured very differently,” Franceschini says.
A certain contempt has attached to direct marketing and cold calling, particularly in the consumer space where most people see it as an unwelcome intrusion into their private lives.
The situation is different in the B2B context. Most of the companies SmartCompany spoke to that sell B2B say they find direct marketing (usually by email) and telemarketing to be a relatively cost-effective lead generator.
According to Brennan IT’s Sims, direct marketing success is not just a matter of buying the biggest contact lists – without solid market research, the communiqués are likely to fall on deaf ears.
“The issue with consumers occurs when a business calls them about something they’re not interested in, and it’s the same in the business market if a call or email is irrelevant,” Sims says. “You need to do your research and understand what clients’ issues are and the outcomes they are trying to achieve. If you make a call and help them address that need, they are not going to get annoyed and you will be able to progress.”
It almost doesn’t need to be said, but today anyone even thinking of selling to business needs to have a persuasive and professional website.
The fragmented nature of the small and medium sized business market means that, in many cases, you won’t approach them about a sale – they will come to you, via your website.
Asset management software vendor SmartPath relies heavily on the marketing power of its website. The company’s general manager of software asset management Phil Hare says the web helps create something of a level playing field for businesses with relatively small marketing budgets.
“We don’t want to try and educate the market about what we do because it is cost-prohibitive to do so, so we focus on those who hit the website. Because we have a specialised product they are almost pre-qualified if they have come by search to our website, so for us it is a matter of ensuring we present a compelling argument to them.”
To take full advantage of your website, however, it must present a very strong value proposition to visitors, and it must do so on the front page – the further visitors have to go, the more you will lose, Hare says.
Search engine optimisation and marketing are also important tools in ensuring those “pre-qualified” customers who are searching for a product like yours come to your website first.
Carolyn Stafford, principal of Connect Marketing, advises businesses to seek professional assistance in putting together a website.
“The web is incredibly important, but I see so many business that have a very dull website that is essentially just a brochure in electronic form,” Stafford says. “It is such a critical thing, that you need to make sure it is properly designed and provides rich and changing content to visitors – it is not something you can set and forget.”
SmartPath and Brennan IT publishes white papers. Entity Solutions participates in a benchmark survey of the independent contractor sector it works in, and MYOB surveys its small and medium size business customers.
The reason? By providing information that potential clients may find independently interesting, they hope to bring them within the orbit of their brand.
The benefits of doing so are numerous. MYOB’s small business survey earns it significant media attention because it is a relatively detailed and comprehensive snapshot of attitudes in the sector, while it also provides the company with valuable intelligence on its client base.
For example, its move into web hosting has been partly driven by a survey finding that a majority of small businesses don’t have their own websites.
“Our survey doesn’t talk about our products at all, but we think it helps us build a brand by associating us with the qualities we want to place on our products,” MYOB’s Reed says. “It is a most effective channel to market because you get broad exposure for next to nothing.”
A website chock full of interesting information will also be more of a magnet for customers, both because of the content itself and the search engine optimisation boost it brings.
For others, the key use of research and reports is to be able to put something other than marketing guff in front of the sceptical eyes of direct marketing recipients.
“There is an awful lot of fatigue in corporate land in terms of being sold to. They’ve seen the sell a thousand times before, but if you can send information to a decision maker that is relevant, informative and helps them carry out their work better, they’ll accept it,” SmartPath’s Hare says.
A related marketing tool also popular among successful B2B sellers is the seminar. Like surveys and reports, it prioritises information over the hard sell, but it has one additional strength – the opportunity for face-to-face meetings with current and potential clients.
The seminars don’t need to be about your product – it is more important to deliver information that is interesting and relevant.
MYOB often runs seminars, both on its product and related business subjects. Chief executive Reed says it is a particularly effective form of marketing to small and medium sized business.
“It is cost effective because it is one-to-many, great for marketing to small business because they tend to see it as less threatening than a sales person coming to their office and, best of all, it is a great way to directly engage with people,” Reed says.
To make your seminar even more attractive to small and medium sized business, consider running it as a webinar – an online seminar that people can patch into through their computer.
“Webinars are great because you cut down the cost of travel and they are a time efficient way for you to touch base with your clients – you can get 10 people together in the three minutes it takes them to log in,” he says.
The business and consumer markets resemble each other in at least one regard – they are both made up of a few key thought leaders who heavily influence the remaining majority.
Finding these “influencers” is the first and most important step, but it shouldn’t be too difficult. Leading members of industry associations, professional services suppliers such as accountants or lawyers, or dominant players in a sector, are all likely targets.
If possible, take any opportunity to participate in, speak to, or meet with any professional associations in your sector. But avoid the temptation to use it as a selling opportunity – a long term strategy of reputation enhancement and relationship making will pay the biggest dividends.
MYOB’s Reed says his business has focused on building up a relationship with a network of accountants who recommend their products.
“Recommenders and influencers are incredibly powerful, but it takes a long time. The accountants that recommend our product are a big part of our strategy but it took 5 or 10 years to earn the confidence of that channel,” he says.
It can also be hugely useful if you can turn your existing customers into advocates for your brand, a process that can be helped along by offering discounts or benefits for referrers.
Given the costs involved, it may come as a relief that advertising is not central to most B2B strategies. Indeed for several firms it plays no role at all.
Entity Solution’s Franceschini says his firm stopped advertising around five years ago.
“We just don’t think advertising is a very effective way of getting to a business audience. We would rather do things like talk at a workplace relations conference or bring out a white paper. Even if we were to advertise in an industry magazine, people will see it and probably not give it a second glance and they know it’s been paid for,” he says.
“Unless you’ve got a huge budget and you’re going to do a concerted campaign to get traction, you’d get far more value spending the $100,000 on a sales person.”
Brennan IT’s Sims says the difficulty in measuring return on investment in advertising is another big negative.
“We think it’s hard to get a message that will pay a return. We’re focused on the mid market, so there aren’t a great variety of mediums available and we don’t have a big budget. If we do advertise we try and be very targeted and look for measurable returns,” Sims says.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
