Tag Archive for: marketing

Let us win your dream customers

01 Feb
1 februari, 2018

Account Based Marketing is a strategy to win key customers. You know them, and you probably have a dialogue with them but the challenge is two-folded:

A: Your potential customer probably already has a number of suppliers. Why should he take the risk to start working with your company?

B: You probably meet a handful of customers, while the decision group not seldom is 20-30 people of whom you will never get access to some.

The solution is quite simple, it just needs some focus and patience

  1. Map your potential stakeholders and their function/interest
  2. Serve them the information they look for through adapted content.
  3. Digital channels is of course a great tool since you basically can target each person

Why not make a try?

Internet of Things förändrar världen

23 Oct
23 oktober, 2017

Internet of Things, eller sakernas internet på vårt eget fattiga språk, öppnar nya möjligheter till att utveckla nya produkter och fantastiska användarupplevelser.

Enligt analysföretaget Gartner beräknas antalet uppkopplade enheter vara 20,8 miljarder år 2020. Gartner konstaterar att fler än hälften av alla nya affärsprocesser och system kommer innehålla någon form av IoT år 2020.

Redan idag kan många produkter i hemmet kommunicera med varandra och göra livet enklare för dig. Du blir påmind, får rekommendationer och har allmän koll. Och ibland är det bara för att skapa en upplevelse. Husqvarnas automatiska gräsklippare kan t ex styras via en app i telefonen. Varför det kan man fråga. Tämligen onödigt, men samtidigt kul när gänget sitter och tar en öl på terassen.

Men den värdemässigt stora revolutionen kommer inom B2B där IoT ofta går under samlingsbegreppet ”connectivity”. Många produkter kommer att vara uppkopplade så användning och service kan effektiviseras. Utnyttjandet kan optimeras, du kan ladda ner extra kraft när du behöver det och felsökning och service kan ske på distans.

Möjligheterna är oändliga, och om du inte redan nu gör det, kan det vara en god idé att redan nu fundera över hur ditt företag kan dra nytta av utvecklingen.

Övertyga kunderna med VR

09 Oct
9 oktober, 2017

VR-applikationer är ett område som utvecklas starkt, främst tack vare att de enheter som ska användas idag är lika kraftfulla som en liten dator. Idag växer antalet applikationer snabbt inom Virtual Reality (VR), Mixed Reality (MR) och Augmented Reality (AR).

Var ska man då använda de olika VR-teknikerna? Snart överallt är den enkla sanningen. Idag finns de flesta applikationer på mässor eller i butiker för att skapa en upplevelse runt varumärket.

En enkel, men imponerande, applikation är att ta kunder på besök dit de inte kan eller får komma. Ibland är det viktigt att kunna visa upp t ex sin produktion – och det löser du enkelt genom en VR/360 film. Ett exempel finner du här.

Digital Metal leder utvecklingen inom additiv tillverkning. Många konkurrenter befinner sig fortfarande i prototypstadiet medan Digital Metal har tillverkat över 200.000 komponenter.

En VR/360-presentation visar runt besökaren precis som under ett vanligt fabriksbesök. Smart och imponerande – och relativt enkelt att ta fram.

What is your customer willing to pay?

12 May
12 maj, 2010

One of the core issues for B2B marketing is often: ”What is the customer willing to pay?”

The answer is simple (at least in theory): the price the buyer can accept (P) is the product’s perceived value (V) divided by the perceived risk of buying from you (R).

Right Price formula in b2b

The perceived value (V) is the actual, rational value that your product or service can be expected to create for the buyer in the short- or long term. This value is almost always about your product’s or service’s ability to in some way contribute to higher revenues, lower costs or improved cash flow. And it is this value the buyer is interested in, as a B2B transaction almost always originates from a rational, defined need – to streamline a process, improve a product, etc. It is more the rule than the exception that the purchaser identifies the need and contacts those suppliers he or she believes have the ability to satisfy it.

The perceived risk (R) is the perceived value’s inverse. Just as rational as the value of your offer can be assessed, just as irrational is the buyer’s risk evaluation about buying from you. And just as easily as perceived value can be described, just as complex are the factors affecting perceived risk.

Let me generalize.

There are two kinds of risk variables in a B2B transaction: the degree of uncertainty concerning the transaction’s outcome, and the degree of negative consequence if a wrong decision is made.

The first variable, the risk of unwanted outcome, is very much a question of credibility – that is the buyer’s confidence in you as a seller. ”Can they really deliver what they promise? Are we really going to save 20% in material costs?”

The second variable, the risk of making the wrong decisions, is about dealing with the consequences for both the company and the individual. ”What is the result for the company if we make the wrong decision? How much does this risk expose me as a professional buyer?”

Examples of the perceived risk can be read about in Hawes & Barnhouse’s Study from 1987, in which they asked B2B buyers to rank the risks they perceived as most serious. ”That I feel professionally incompetent” came in first, followed by, for example, ”that the relationship with the company’s customers will be strained”, ”that this reduces my chances of promotion” and ”that my status among colleagues will be diminished”.

Risk assessment is substantially emotion-based. Fear of making a bad choice – a choice the buyer may subsequently regret. And, many times, the fear of making a bad choice is stronger than the desire to do good. ”What has worked so far has, despite everything, worked. And the companies I know I do, after all, know.”

According to the IMP Group, B2B-transactions are characterized by buyers being reluctant to sever existing business relationships, and their concern about all the technical and logistical problems that may arise in connection with a possible change of supplier. But also by B2B buyers being reluctant to spend too much time making detailed evaluations and comparisons of competing brands.

In addition, the perceived risk in a B2B business is seldom linked to a single individual. In the vast majority of B2B purchases, the choice of appropriate supplier/brand is made by a group, explicitly or implicitly. In the end, this means it becomes a compromise – the lowest common denominator of the group’s perceived risk. The choice becomes the option that everyone in the group can accept (or believes to be acceptable), rather than the option that one or a few in the group prefer.

Put simply, it is more convenient for B2B companies to choose a supplier that everyone knows and has sufficiently high regard for than a brand that is unknown to most, but which has the (rationally) better offer. Paradoxically, that makes it easier to later defend the purchasing decision, both for oneself and one’s colleagues.

The bottom line is that the B2B buyer is prepared to pay more as the perceived value of a good or service increases, but only so long as the risk is deemed acceptable.

And as more and more brands in more and more industries become more and more similar in their offerings, it can often be more profitable – especially in terms of ‘closing the deal’ – to try to reduce the buyer’s perceived risk than to try to increase the perceived value.

This post was originally published in Swedish on the blog The Brand-Man. There, you can also read about the price formula for comsumer markets (also in Swedish).

It’s time to bury the four P’s.

14 Dec
14 december, 2009

In 1960 E Jerome McCarthy published Basic Marketing. In it, he suggested that a company or product’s strategic position in the market could be described by four P’s: Product, Price, Place and Promotion.

According to McCarthy, the 4 P’s are the tactical tools at companies’ disposal to streamline their marketing, and they collectively became known as the marketing mix.

A few years later, Philip Kotler built further on McCarthy’s P’s. Kotler’s books were much more popular than McCarthy’s, which probably explains why most marketers now give Kotler credit for the 4 P’s.

Kotler, however, soon realized that the four P’ s were insufficient, and tried in the 1980s to introduce two more: Public opinion and Political Power. Other marketing thinkers have come up with more suggestions that further complement – including Packaging, People, Process and Physical Evidence.

Despite their obvious shortcomings, McCarthy’s soon-to-be 50 year-old 4 P’s remain one of the elemental laws of nature in the marketing universe.

But the world in which the four Ps first prevailed held completely different marketing conditions than today’s.

In the 1950s and 1960s, the Western world was in the midst of unprecedented social change and growth. After World War II, there was a strong need for practically everything, and the rapidly growing consumer machine had to be fed with more and more products. If anything, in any way, benefited the standard of living, it essentially sold itself.

The media world also looked different. The consumer obediently adapted him or herself to the relatively few media channels through which news, information and advertising were trumpeted out – with neither opportunity nor expectation of being able to influence when, where or how he or she would consume the messages, or contribute to public thinking or opinion on the subject.

Those who made and sold products quite simply held both the baton and the megaphone.

And it was thus, in this from-the-inside-out world, that the four P’s were born – as well as a number of other fundamental marketing theories.

Common to these post-war theories is that they assume that the seller has the power to define how the buyer should interpret the offer – and thus the value, usefulness or experience of the product, service or idea.

That power no longer exists.

Firstly, globalization and ever increasing competition have marginalized the importance of product features and functionality, as competing products in almost all categories now offer essentially the same basic functionality. In addition, prices have become almost completely transparent, and geographical distance now very rarely has any real significance. Last but not least: customers no longer want to listen.

The typical ‘stupid’ consumer, who previously had neither voice nor influence, has now – thanks to the Internet and social media – been replaced by ever more knowledgeable and critical participants – each with a growing influence on how brands are perceived and experienced.

In short: the buyer has grabbed the baton and seldom even hears the megaphone.

Yet many marketers continue desperately to try to make the 4 P’s work. Maybe the P’s time has passed. Maybe it’s time to bury them once and for all.

That’s the opinion of marketing professor Robert Lauterborn, author of books like The New Marketing Paradigm: Integrated Marketing Communications. He proposes an alternative approach based on the customer rather than product, which helps us see the business from the buyer’s point of view, not the seller’s. Lauterborn’s 4 C’s are  Consumer, Cost, Convenience, Communication.

The starting point is a Consumer (or customer, if you wish). Forget about the product. There is simply no longer any reason to develop something just because it is possible to do so, and expect that it will automatically sell. Focus instead on really understanding the customer’s needs and wishes. People, after all, no longer buy products. We want what the product results in: a value, a utility or an experience. What do customers expect of your business or product?

As a strategic positioning and tactical variable, the product’s actual price is also irrelevant. Price is just one part of the buyer’s total cost to experience the usefulness or value of the product. Think instead in terms of Cost to Satisfy. Most companies do not compete, after all, with a few percent price difference here or there, but with the sum of the customer’s perceived costs – both monetary and emotional. In addition to the price tag, for example, a tin of snuff costs the time it takes to go to the kiosk, the guilt of being nicotine-dependent and even the remorse that the money is not being used for something more valuable – maybe a summer vacation with the family. ”The most snuff for the money” is not the main value measure – not even ”the best nicotine kick for the least money”.  The value, benefits and experience are determined instead in a multitude of complex relationships, each of which differs slightly from customer to customer.

‘Place’ is, if possible, even more irrelevant. People no longer need to go anywhere to buy just about anything they want – unless they want to. Everything is available on a computer screen or in a catalog right in front of them – around the clock. Think, then, in terms of ‘Convenience to buy’. That does not mean that the distribution channels are unimportant – only that their role has changed. Think about how your customers would like to buy, and how the buying process itself can make your customers’ lives easier and less time consuming. Think about whether there is anything related to your product that the customer wants to experience, something that will give you her undivided attention. If you can manage that, you can actually get customers to travel great distances and still experience it as an easy, convenient, timesaving way to buy.

And, lest we forget, promotion is an obsolete way to look at the role of marketing communications. Mass marketing is history. Customers expect, rightly, a two-way communication with the brand. Think Communication (or conversation, if you wish). To communicate is to exchange thoughts, knowledge, feelings and ideas – to both listen and speak. In brief, it’s collaboration between buyer and seller in order to create a desired value and a desired benefit or experience on both sides.

Lauterborn’s four C’s reflect a thoroughly customer-oriented marketing philosophy. One which, in my opinion, much more accurately describes a brand’s strategic positioning and tactical opportunities than McCarthy’s four P’s.

Whether it is wise to limit ourselves to the number 4 and the letter C, is open to discussion.

So let’s do it. Discuss, that is.

Originally posted in Swedish on The Brand-Man, here.

How important is price?

21 Sep
21 september, 2009

If you ask your customers what their most important criteria are for choosing a supplier, most will say: “Number one is ‘price’. Number two is ‘quality’.”

They’re lying.

But it’s not a deliberate lie. We humans answer the question asked, and this is simply the wrong question to ask. The only time it has any relevance, and the only time it will be answered truthfully, is if everything else is identical between all competing alternatives.

Which, of course, never happens.

But, if you ask which brand on the market customers prefer, and then identify what customers believe makes that brand better than the competition, you will come much closer to the truth. Their key differentiating criteria will revolve around factors like ‘confidence’, ‘relationship’ and ‘service’. Price will be ranked further down the list.

When your sales force or customers start insisting that you must lower prices, it is therefore not necessarily your price that is wrong. The problem is more likely to be that customers do not feel they are getting sufficient value for the price you charge for your product.

What each buyer is really interested in is value. And the value of anything is the sum of the benefit divided by the price: Value=benefit/price.

You can choose either to reduce your price, and thereby increase relative value (”I may not be getting much, but I’m not paying much either”). Or, you can enhance the perceived benefit (”I am really getting value for the money I pay”).

The thing is that customers always strive to pay as little as possible. And a good salesman always does everything possible to justify the highest price he can possibly get.

This does not necessarily mean that all customers want to pay as little as possible, and all salesmen want to be paid as much as possible. The price range – which both seller and buyer are already mentally equipped with – is based not only on which business category your brand is associated with, but also its perceived market position within that category.

In short: You get the customers you deserve.

By that I mean that, if your customers are only interested in your price, it’s because you haven’t given them something else to be interested in. Your customers feel that your main competitive advantage is your price tag, and that your company is more or less offering a commodity.

But, if your business for instance is recognized as more competent in its field than any other company – i.e. the competence leader (implying high credibility and a good reputation) – you can be much better paid for delivering an identical product or service. The customer, quite simply, perceives a greater business value.

Your job as a salesperson, and that of any marketing communication, is therefore to convince customers that your brand offers more value; and that that value differs in a relevant way from any other competitor’s offering. But you must also get the customer to really believe that the promised value will be realized. Last, but not least, you must get the customer to like your brand.
If you manage this entire chain, any price discussion will be marginalized.

Finally: Remember that, the moment a client asks for the price of the product, you have a very strong buying signal.

And that you’re actually selling value.

Lovemarks and B2B branding

08 Jan
8 januari, 2009

Is the idea of B2C Lovemarks transferable to a B2B context? If so, how should a B2B Lovemark be characterized? Based on the theories of Saatchi and Saatchi CEO Kevin Roberts, and a Master’s thesis conducted in 2008 at the University of Lund, Sweden, we explore the possibilities of using Lovemarks in B2B branding with the aim of boosting brand preference and creating customer loyalty beyond reason.

In consumer markets (B2C), the importance of branding has been widely recognized for quite a while, but little research has been done on branding in business-to-business (B2B) markets.

Even today, some B2B marketeers think that the decision-making process of professional customers solely depends on hard facts like functionality, price and quality. Soft emotional facts, like empathy and enjoyment, are seen as more or less irrelevant.

If that’s the case, then how come some of the world’s most valuable brands are B2B brands? According to BusinessWeek/Interbrand (2008), IBM ranks as the world’s 2nd most valuable brand, General Electric 4th, Intel 7th, American Express 15th, Cisco 17th, Oracle 23rd, HSBC 26th, UPS 28th and SAP 31st. In fact, of the world’s 30 most valuable brands, 11 are B2B brands.

Several scholars (Mudambi, 2003; Lynch & de Chernatony, 2004; Kotler & Pfoertsch; 2006) have started to research the relevance of branding in B2B. According to their respective findings, they agree that brands serve exactly the same purposes in B2B markets as they do in consumer markets: they simplify the decision-making process and establish a competitive advantage, price premiums and long-term profitability. As such, they must be seen as strategic assets – even in a B2B context.

Creating an emotional bond
Branding is, in short, about drawing seller and buyer closer to each other on an emotional level. This is becoming increasingly important, particularly in B2B markets, since customers are better informed than ever about competitors’ and substitutes’ offerings. The business environment of the 21st century is ultracompetitive; customers are flooded with brand messages and are increasingly more time-pressured, stressed and confused with the vast array of choice. Simply put: competing only on a functional benefit level is short-term oriented because the development of technology is so fast and imitation so common.

According to Kevin Roberts, CEO of Saatchi and Saatchi (and the one that coined the term Lovemarks), the world is shifting from an Information Economy via an Attention Economy to an Attraction Economy. Customers seek individuality in their relationships with brands, they want interactive involvement and entertainment, and they seek brands they can bond with. And by doing so, they are able to ”neglect” all other possible choices.

Neurologist Donald Calne claims that people are 80% emotional and 20% rational. In branding and marketing, the essential difference between emotion and reason is that emotion leads to action while reason leads to conclusion. So, the more emotion that is involved, the more action can be expected. Or, as novelist Maya Angelou has said:

”People will forget what you said, people will forget what you did – but people will never forget how you made them feel.”

But is it possible to create strong emotions in B2B relationships? Is ”love” truly realistic?

What is a Lovemark?
In his book, Lovemarks – the future beyond brands, Kevin Roberts captures the term “Lovemark” in many different ways. Based on all his descriptions, a tentative definition could be:

“Lovemarks are strong emotional relationships or bonds between brands and customers that are based on great performance and which are identified, owned, loved, defended, advocated and forgiven by customers. Lovemarks create loyalty beyond reason.”

Roberts identified a combination of three qualities that draw the line between ordinary brands and Lovemarks: mystery, sensuality and intimacy. He further argues that brands have been ‘captured by formula’ and are too stiff to adjust to the fast-transforming customers of today. These customers look for more individuality, personal relationships, experience and outstanding performance – which is true for both orientations, B2C and B2B. Roberts concludes that ”A Lovemark will always be a great brand, but not all great brands are Lovemarks”.

A Master’s thesis conducted in 2008 at the University of Lund, Sweden (The Potential of B2B Lovemarks), sought to answer the following three questions:

1. What role do intangible factors play in B2B branding?
2. Is the idea of B2C Lovemarks transferable to a B2B context?
3. How should a B2B Lovemark be characterized?

According to the authors, the main contribution of the thesis is to fill the knowledge gap regarding B2B Lovemarks by creating a framework for how B2B brands can be established as Lovemarks. The thesis aims to verify the general idea of the Lovemark and show which brand attributes sustain Lovemark status and contribute to it by studying Lovemarks from a managerial perspective – which had not been done in the past.

The thesis concludes that Kevin Roberts’ theory of Lovemarks can, in fact, can be adapted to B2B branding, but the definition of what constitutes a Lovemark may need some adjustments.

The problem in most B2B categories is that as soon as a brand/company becomes a market leader (which suggests a high level of customer loyalty), customers are in fact less willing to ”love” it. The simple reason being that, in B2B, obvious market leaders often charge an extra premium and are just as often perceived as being a bit cocky and overly self-confident. Since ”love” is generally interpreted as a purely warm and positive feeling, many market leaders in B2B can be regarded as disqualified with regard to brands that are loved. They are however often highly respected, liked and, especially, highly trusted.

But what is love? And what kind of love is Kevin Roberts referring to?

The eight faces of love

Robert J. Sternberg, American psychologist and psychometrician, claims that love consists of three components:

1. Intimacy (refers to feelings of closeness, connectedness and bondedness)
2. Passion (encompasses drives that lead to romance, physical attraction and sexual consummation)
3. Decision/Commitment (refers to deciding that someone loves someone else and a long-term commitment to maintain that love)

Intimacy is seen as “warm” (emotional investment, empathy), passion as “hot” (motivational involvement, arousal) and decision/commitment as “cold” (cognitive interest). In a love relationship, these three components have different weights. For instance, in a short-term romance, passion is rated highest, while in a long-term close relationship, commitment and intimacy play the most important roles. The combinations of the components that constitute “love” allow eight different emotions, summarized by Sternberg in the table below (Taxonomy of Kinds of Love, Sternberg, 1986).

In relation to Lovemarks, Kevin Roberts most likely refers to “consummate love”. In the B2B context, however, love should probably be considered as the kind of love where bonds and long-term commitment are most valued. Minor failure and shortcomings can be forgiven, and physical attraction is of relatively least importance. Consequently, Lovemarks in B2B branding should be that of “companionate love” – which can become a powerful foundation for “loyalty beyond reason”. Or, as psychologists H. T. Reis and A. Aron summarize it:

“Much evidence indicates that love in long-term relationships is associated with intimacy, trust, caring, and attachment – all factors that contribute to the maintenance of relationships over time.”
Finally, Sternberg stresses the fact that love ceases to exist unless expressed, “Without expression, even the greatest loves can die”.

Related to Lovemarks, this means that companies need to constantly express (communicate) what they ‘feel’ for their customers.

Is your brand loved?

Lovemarks

Customer-Based Brand Equity model (CBBE, Keller, 2002, & Kotler/Pfoertsch, 2006), modified by Pyramid.

If we accept that Lovemark refers to companionate love in a B2B context – brands that have created loyalty beyond rational/intellectual reason – there are quite a few possible examples of Lovemarks:

Bluetooth (technology)
Has persuaded more than 10,000 companies to sign a technology standard agreement and gone from 1 product to 3 billion (!) in only 8 years, making it the fastest growing technology brand ever.
Caterpillar (heavy machinery)
Same story as with trucks – dependency and reliability to the brand seems to be far beyond rational product features and benefits.
DeWalt (handcraft tools)
As with trucks and heavy machinery, handcraft tools are most often chosen based on brand preference (and loyalty) rather than on actual product features. In many construction companies a “preferred tool brand culture” is obvious.
Financial Times (newspaper)
Perceived as the no. 1 authority in financial news coverage.
IBM (consultancy)
One of the most valued brands in the world. Not because IBM employees are in fact the most competent consultants, nor because of the numerous methods developed by IBM.
McKinsey (consultancy)
You trust them. Period. Companies make strategic decisions based on McKinsey recommendations.
Reuters (news service)
A strong brand in its category that comes with a huge amount of credibility.
Scania (trucks)
Haulage contractor companies, and especially the truck drivers, tend to have very strong emotional relations to a specific truck brand.
Symantec (IT security)
This expert in IT security has steadily established itself as one of the big technology brands through excellent products and service, and is now a real rival to the likes of HP, Oracle, etc.
Tenon (accounting)
Voted in 1995 as the UK’s best B2B brand in a survey carried out by B2B Marketing magazine, beating high-profile brands including Accenture, HP and Cisco. Tenon focuses on close partnership with its customers, using a more personal, welcoming approach.

In the above-mentioned Master’s thesis, the authors suggest a fairly simple “Lovemarker Model”, based on Kevin Roberts’ model introduced in his second book about Lovemarks. According to Roberts, the model should be regarded as a guide on how to build Lovemarks. The tool is a questionnaire that specifies the aforementioned categories of love and respect, and that help evaluate a number of performance and perception components according to ”hot”, ”warm” or ”cold”.

If you are interested in finding out whether your brand has Lovemark potential, you are welcome to give us a call for a personal presentation.