Is There Value in Your B2B Content Marketing?

Content marketing is a term that gets a lot of buzz these days, but the basic concept of capturing prospects and buyers through stories has been around for generations.

This video put together by Content Marketing World shows a full timeline of the history of content marketing, including examples. According to the video, the term “content marketing” emerged only around 2001, but the concept itself started over a century ago. The earliest example they cite is John Deere’s magazine, The Furrow, launched in 1895. (This magazine is still around, with a circulation of 1.5 million in 40 countries and 12 different languages.) The video also calls out “The Michelin Guides” put forth by tire manufacturer Michelin back in 1900 to help drivers maintain their cars and find good inns and hotels while traveling.

What is the ultimate aim of content marketing? Broadly speaking the goal is to get prospects and buyers to connect with what you have to offer through storytelling and education. The Content Marketing Institute is even more specific in its definition of content marketing:

The technique of creating and distributing relevant and valuable content to attract, acquire and engage a clearly defined target audience in order to drive profitable customer action.”

If the purpose of content marketing is not only to attract prospects but also to turn them into customers, then it only makes sense in a B2B context to focus closely on your value proposition. In other words, B2B marketers need to remember that there’s generally a big difference between the ways B2C marketers approach content in contrast to their B2B counterparts. In a previous post, “Why Branding Doesn’t Work on B2B Customers,” we made clear distinction between the “rational” world of the B2B customer and the “irrational” world of the B2C customer.

“B2C marketing efforts are frequently driven by such irrational factors as image, self-satisfaction, fashion, the need to be cool, sex appeal, etc. That’s why consumer marketing generally lives and dies by advertising. Very few consumer products or services can survive without it. Consumer ads, promotions and other image projections often establish the product’s value and create the demand for it.

The B2B world, by contrast, is rooted in the rational. Branding that appeals to irrational or perceived needs just isn’t going to work, because in the end businesses will not buy nor continue to buy things that don’t actually help their business.”

In other words, the B2B decision-maker looks for economic value when investing in a solution. While a great story might be appealing to B2B prospects, they won’t become customers unless that story can illustrate how you can help them save or make money.

Although many B2B marketers think of content marketing in terms of articles, blog posts, PDFs, white papers, video, and infographics — all great and valid forms of content that can engage prospects and customers — I don’t often hear about assets that can help a prospective customer understand the value that an offering can deliver as part of the discussion. These assets include such things as value calculators and ROI tools and I believe that they’re a critical component of a content marketing strategy if the offering is more than a standard transactional decision and constitutes a significant investment. Considering the interest the B2B buyer has in financial metrics, I think that is a missed opportunity.

What kinds of content marketing do you rely on to attract prospects and turn them into customers? Do you use ROI tools or value calculators as part of your content marketing strategy?  Please share your thoughts in the comments section.

Three Keys to Influencing B2B Customers

On a very basic level, the job of sellers and marketers is to help the customer through a decision-making process. Recently Ilya Bogorad addressed the topic of decision making in a terrific blog post, “Making a Case: How to Become a Thought Leader and Influence Decisions,” and I highly recommend that anyone in sales or marketing read it. His insights on how to create a convincing business case are worth your time.

In my view, there are three important things to keep in mind as you travel along the decision-making journey with a customer or prospect.

One: Understand what they’re trying to accomplish. What is the main objective of your client? If you’re not playing from the same sheet of music, your deal won’t go far.

Two: Understand what they’re being measured against. How will the client define success? Is that a three percent increase top line revenue? A twenty percent reduction in labor costs? To craft a solution jointly, you must first understand what success looks like from their perspective.

Three: Understand what their alternatives are. Find out what they’re considering as alternatives to investing in your solution. That could be a competitor’s solution, but it could also be making an investment in an unrelated area. This last point is key, because sometimes sellers don’t understand that even if you’re talking to a customer and saying, “Hey, this problem is worth solving and we are the best ones to help you solve it,” that customer still might have to go back and compare against other alternatives as a matter of protocol.

When it comes to making a business case to invest in your solution, this is where a TCO comparison and ROI tools could help you. A TCO tool illustrates what the prospect’s best choice is relative to other alternatives, usually a competitor. An ROI tool shows how much the prospect stands to gain (in revenue, cost savings, or both) by investing in your solution relative to the status quo.

At the end of the day, any B2B company is concerned about one thing: dollars and cents. But it is also subject to the personalities and decision-making styles of the decision-makers. As you help your prospect through the buying journey, keep your focus on their unique situation as well as their potential financial risks and benefits. This is the best way to gain trust and influence, no matter what style of decision-maker you’re dealing with.

What are your tips to gain influence with decision makers? Share your thoughts in the comments section.

What Do Buyers Want from Sales and Marketing?

ID-10085527

Image via ddpavumba / FreeDigitalPhotos.net

Today’s post is by Michelle Davidson, Editor of RainToday. It appeared originally on RainToday.com’s Rainmaker Blog and is published here with permission.

We know what buyers don’t want from sales and marketing. They don’t want hard sales pitches. They don’t want long presentations that have no value. They don’t want to talk to a salesperson unless it’s on their terms. They don’t want impersonal marketing emails.

What do buyers want? Here’s a look at a few things at the top of their list:

1. Buyers Want Knowledgeable Salespeople

For the most part, buyers are independent and like to self-educate, says Josiane Feigon, author of Smart Sales Manager. They want to conduct their own research, learning about an issue and possible solutions on their own time and in their own manner. They don’t need salespeople or professionals to pitch their services; they need people who can answer their questions, analyze the situation, and offer advice.

Buyers “are desperate for salespeople who are bright, are smart, are intelligent, [and] are doing their homework. They want a virtual relationship or even a social relationship with those types of salespeople,” Feigon says in her podcast interview, “Buyers Don’t Need Traditional Salespeople Anymore.” “So, really the message is salespeople must become a lot smarter, a lot leaner, [and] much more equipped to meet this customer on their terms.”

Andrew Sobel goes further and says buyers want advisors. They want people who will collaborate with them as well as educate them, he writes in his article, “Is the Trusted Advisor Still Trusted?”

That means you must:

  • Be empathetic
  • Put buyers’ needs first (even if it means saying no)
  • Have big-picture thinking so you can see trends and connect them to their business

Advisors “go beyond ‘professional credibility’ and build deep personal trust with their clients. They have great integrity, put their client’s interests first, and are immensely reliable and consistent,” Sobel says.

Such trusted relationships reduce risk, he says. They reduce the risk of misunderstandings, delivery problems, and missed deadlines.

“Clients know this and value it because we live in a world that’s more fraught with risk than ever,” he says.

2. Buyers Want Multimedia Marketing Materials

Buyers’ preferences run the gamut when it comes to marketing materials. Some have fully moved into the online world where they want to see everything on their laptop or mobile device. While others like traditional print marketing, and others respond well to a mix of both.

So, if you think the traditional brochure has gone the way of the dinosaur, you are mistaken. It plays an essential role in a multi-faceted marketing strategy.

A brochure “has staying power and a readability that’s greater than a blog or social media site,” Bruce W. Marcus writes in his article, “Are Printed Brochures Obsolete?” “And unlike a blog or a website, which can be read only on a computer or mobile device, a brochure can be read anywhere—no Internet connection needed.”

It can’t, however, be the keystone of a total marketing effort, Marcus warns. But when combined with other marketing activities, it can be powerful and offers a “strong overall impression of a firm.”

And when done well, a brochure “can demonstrate a firm’s most valuable asset—its skills and intellectual capital—and serve as a catalog that describe a firm’s capabilities, facilities, expertise, or point of view,” he says.

3. Buyers Want You to Make It Easy for Them to Make a Referral

A pleased buyer is happy to make a referral for you, but you have to make it easy for them to do so. They already have more than enough to do; don’t give them anything more.

That means staying away from questions such as “Do you know anyone who would be a good fit for our business?” or “Who can you introduce us to that would make a good client for us?”

“While those questions seem obvious, they’re useless because they’re too broad,” says Colleen Francis in her article, “A Pragmatic Way to Ask for a Referral.” “Almost always, the response you’ll get is, ‘I don’t know, but let me think about it.’”

Then usually they go back to what they were doing and forget about your request, she says. It isn’t intentional. They just have a lot of things going on, and they don’t have the time or energy for extra work.

“To successfully acquire referrals, you must fundamentally change your requests,” Francis says. “First, do the work for your client. The best thing to do is go to the client equipped with the names of people and their positions or the companies to which you want to be introduced. Then ask for that specific introduction.”

Michelle Davidson RainTodayAs Editor of RainToday, Michelle Davidson oversees all of the articles published on the website and produces the weekly newsletter, the Rainmaker Report. She also produces the site’s weekly podcast series, Marketing & Selling Professional Services, and the site’s webinars. Prior to joining RainToday, she worked for several years as Editor in Chief of various websites at TechTarget; she also worked as a copy editor at magazines and newspapers, as a book project editor, and as a reporter. Contact her at mdavidson@raintoday.com or @michedav.

Understanding Your Impact on a Customer’s Income Statement

We’ve said this many times: before you can deliver value, you must first demonstrate to the customer that you understand their business challenges.

Knowing the fundamentals of an income statement can really help you in this regard. Unless you understand its components (maybe not fully, but at least to some extent), your conversations with customers are probably still centered on marketing-speak and you haven’t yet gotten to the level of talking about a true value proposition.

An income statement is simply a financial statement showing how much money the company made during a certain period of time (usually a month, quarter, or year) and what the company’s revenue and costs were. Here is the basic flow of an income statement (sometimes called the P&L):

Sales Revenue

Subtract Cost of Goods Sold (CoGS), which would include things like:

 

  •             Materials
  •             Labor
  •             Other Direct Costs

 

Cost of Goods Sold subtracted from sales revenue tells you your Gross Margin.

Now subtract all of the following expenses (collectively known as SG&A)

 

  • Sales
  • Marketing
  • Research, Development & Engineering (RD&E)
  • General expenses
  • Administrative expenses

 

Once these items are subtracted, you’ll end up with net profit.

If the company is public, an income statement will be published in its quarterly and annual reports (this is by law). The top line of the income statement is how much the company made in sales (revenue). The bottom line is the company’s earnings (profit). For simplicity, we are going to ignore the corporate level concerns like income tax, interest, and other corporate expenses.

Let’s take a closer look at some of these terms.

Cost of goods sold (CoGS). This is simply the direct costs incurred by the company to produce and/or deliver whatever they’ve sold. This amount typically includes the cost of materials and direct labor costs. If your product can lower your customer’s raw material costs or production labor costs, you can impact the CoGS.

Gross margin. Gross margin, also sometimes called gross profit, is simply the company’s sales revenue minus its cost of goods sold. Often the gross margin is expressed as a percentage and calculated as: (sales revenue – CoGS) / sales revenue * 100.

If your offering helps your customers increase sales revenue, the increase in gross margin is how you would quantify the bottom-line impact of increased sales (since your customers gross margin dollars would increase as sales increased). The calculation you should use is simple: increase in sales revenue * (1 – CoGS %) = gross margin dollars.

SG&A. This stands for Sales, General, and Administrative. These are costs the company incurs as part of doing business and is otherwise known as “overhead.” Things like telecommunications charges, IT, office rent, and consulting services (for example, legal representation) would go into SG&A. These costs are independent of any goods you’ve sold, because you pay overhead no matter how many units you sell (or don’t sell). If your solution lowers data center cooling costs, then you are impacting your customers’ SG&A costs.

Net income.

If a company’s leaders want to improve profitability, they have three basic options.

Increase Revenue

1)    Increase the volume of what they sell.

2)    Increase the price of what they sell.

3)    Create a new product to sell.

Decrease CoGS

1)    Reduce the cost to produce the product.

2)    Reduce the cost to deliver the product.

Decrease SG&A

1)    Reduce marketing cost.

2)    Reduce selling cost.

3)    Reduce R&D (or engineering cost).

4)    Reduce administrative cost.

5)    Reduce other overhead cost (including IT).

So, how does it help you to know what’s in a company’s income statement? For one thing, it helps to show the prospect that you understand where their company is financially. For another, it sets you up to talk about your offering in the context of whatever their financials look like. If your offering cannot impact the prospect’s income statement in a positive way (aka, by helping them do one of the three things listed above), then you haven’t yet figured out how you can deliver value to this customer. If that’s the case, you need to figure out how you can impact their financials or move on to another prospect.

How do you leverage financial statements when talking with customers? Share your thoughts in the comments section. 

The ROI of Winning an Oscar

OscarOne of the coolest things (in our opinion) about ROI is that you can calculate it on almost anything.

In the B2B world we obviously use ROI calculations to show our prospects and customers what they’ll gain by investing in our solution or offering. Recently – and just in time for the Oscars – we came across an interesting post from Forbes showcasing a list of actors that deliver the best return on investment for movie studios. Although it’s common to see lists made of actors that command the highest salaries, it’s slightly more unusual to see someone thinking from the perspective of ROI. Here’s the methodology they used:

Taking a star’s pay on a film, and the movie’s estimated budget, box-office receipts and DVD sales, we calculated a return on investment number, and then averaged the numbers for their last three films to get an overall return.

By this reckoning, Forbes placed Jennifer Lawrence third on the list, noting that she yields a return of $68.60 for every $1 she was paid. They also note that actors that accept smaller paychecks actually increase their ROI. (This is why Emma Stone ranked #1 on the list.)

You might assume that an Oscar winner would command a higher salary, but this separate Forbes post indicates that the equation isn’t so straightforward. In fact, winning an Oscar is not a good indication of higher salary earnings.

This is another good example of how there’s more to value than just price tags and budgets. Value is always in the eye of the beholder. To some, going home with a gold statue holds infinitely more value than a multimillion-dollar paycheck. As Forbes notes, actors who put a premium on winning an Oscar sometimes agree to lower paychecks for the chance to work on films that offer lower budgets but higher artistic credibility. To them, the trade-off in salary is more than worth it.

The same principles apply in the business world. Just because a solution is more expensive than anything else on the market does not guarantee that the customer will see a higher ROI. In fact, a higher price makes it more difficult to show a higher ROI. Conversely, the cheapest solution is not necessarily the best value. As we pointed out in a recent post about differentiating from your competition, value is relative not to what you paid for the solution but to what the next-best alternative is. Value encompasses price, plus the cost to deploy and maintain your offering, costs in other areas, and the impact on the customer’s revenue. All of those elements need to be taken into consideration when calculating ROI.

We’ve not yet been asked to assemble a value calculator for a Hollywood studio, but I’m sure it would be fun to try.

What do your customers value? What are some of the trade-offs they make in the name of value? Share your thoughts in the comments section. 

What Matters Most to B2B Customers?

If your most valuable customer had the chance to buy from another supplier, would they?

Of course not! You have the best product on the market. You have the best brand recognition. Your prices may not be the lowest around but you have a rock-solid relationship with this customer. You would walk through fire for them. No way would they leave you for a competitor, right?

Now let’s think about the customer’s perspective for a moment. Imagine, for example, that you’re a purchasing manager at a big industrial company. One thing you buy is widgets. In fact, you’ve purchased widgets from the same supplier for the past 15 years. This supplier has worked with you to alter specs when you needed them altered. This supplier has never raised the price of widgets beyond what you deemed reasonable. When you forecasted badly a few years ago, they didn’t up-charge to expedite a couple of shipments. Twice a year, they come out to visit you and take you to your favorite restaurant. In short, you have a great relationship with this supplier.

Now imagine that you get a call from someone you’ve never heard of, in a place 11 time zones away, and this person tells you that his company can supply you with widgets at two percent less than what you currently pay. Do you spend a lot of time investigating that supplier?

Probably not.

Your reasoning is simple: your existing supplier already takes very good care of you and, more important, is a known quantity. Does this other supplier have a support team that speaks your language? Do they understand your definition of quality? Will they ship on time to meet your production schedule?  Will they stand behind their product? Will they still be in business five years from now? With a new supplier, there’s always risk. A two percent savings in price is often not enough to justify that risk, and it probably will not turn a purchasing manager’s head.

Now let’s imagine you get a similar call, from a different supplier. But this time, the supplier says they can offer widgets at a price 20 percent lower than your current price.

Do you spend some time investigating that supplier?

Of course you do.  You’ll probably start with 15 minutes of online to research the company. You might try to find out if they make widgets in your size range or ask if they’d be willing to foot the bill for you to visit them on-site.  If their claims appear to stand up, you might even order samples and run them through your quality control tests.  In short, no purchasing manager worth his calculator can ignore a chance to save 20 percent.

There are lots of situations in the B2B world where brand, relationship, and reputation may stand up to a two percent price saving. But not many will stand up to a 20 percent price savings from a competing supplier, at least without some deeper analysis.

This is why it’s so important to think about value not just in terms of having a great relationship, “best product”, or brand recognition. Think about the sum total of what you offer. That includes all things that go into a customer’s experience: service, pre and post-sale support, technical support, or just knowing you’ll be there when they call with a technical question two years later.

Your value is always defined in relation to each customer’s specific needs, but it’s also defined relative to their next-best alternative. Just because you’re catering to an individual’s preferences (flying out to wine and dine them) doesn’t necessarily mean you’re providing value to their company that will keep your business relationship intact in the face of an aggressive low-cost competitor.

What matters most to your customers? Share your thoughts in the comments section. 

The Value Lifecycle: Generating Demand for Your Solution

This is Part III of a five-part series about the life cycle of value in B2B selling and marketing. This post examines Phase 2 of the Value Lifecycle: Demand Generation.

Last week we talked about value as it relates to pricing. In Phase 2 of the Value Lifecycle, our understanding of value shifts slightly.

Value phase II

Your aim in Phase 2 is to establish the total cost of the prospect’s current business problem (or problems). That cost could be represented by money the customer is currently spending needlessly, and/or revenue the customer is currently missing out on. As we often explain to our clients, shining a flashlight on the size of a prospect’s problem sets you up to illustrate to the prospect how much value your solution can create for them.

Let’s look at a simple example. Say your prospective customer has a process in place for posting new job openings. This process is paper-based and requires three people to manage it. The labor cost to employ those three people is the size of the problem. Now let’s say your company has a solution that’s electronically based and only requires one person to manage the process. Not only would the customer save the labor cost of two employees, they’d also save on spending money to buy ink and paper. That’s the value created by your solution.

These kinds of cost savings scenarios can exist almost anywhere for customers. Your solution might reduce rent, labor costs, IT support costs, etc. Or your solution might, for example, impact revenue by increasing the number of sales leads or improving an online store’s uptime. No matter the specifics, the general question is, “How much is not implementing our offering/solution costing you?” and/or, “How much revenue are you losing because you lack our offering/solution?”

A key metric in Phase 2 is cost-to-delay per month. That’s the total value of the problem over the period of time (and, again, could be represented by potential revenue lost, unnecessary costs, or both). A month is usually a nice time frame, but you could also quantify the problem in weeks or years. Essentially, this calculation allows you to tell the customer, “Every month you don’t solve this problem, it’s costing you X amount.” Again, this is a way to create a sense of urgency around solving the problem.

Note that Phase 2 analysis doesn’t take into account what your competitors are offering and how you compare to their solution. In the demand generation phase, you’re mostly concerned with what the customer is currently doing today. Why? The way you measure value changes based on where you are in the Value Lifecycle. In Phase 2, you’re not concerned with proving how you’re unique and different – that comes at a later stage. Your primary concern at this stage is to get the prospect excited about solving their current problem.

In Phase 3 you can start to explore the question, “Why should the customer buy from us,” (instead of either doing nothing or buying from your competitor). We’ll explore that concept in next week’s post.

What’s your biggest challenge in quantifying your prospect’s problems? Share your thoughts in the comments section.