B2B Marketers to Learn From B2C Marketers

Wharton School of Business Lauder Professor Dr. Yoram (Jerry) Wind delivered a presentation at Google that provided insights for B2B marketers to learn from B2C marketers.

B2B Marketers to Learn From B2C Marketers

Dr. Wind’s presentation, “The Four Minute Mile and its Implications for B2B Marketers”, begins by setting the stage with a myth.  Dr. Wind summarizes the four-minute mile as:

• In May 6, 1954, Sir Roger Bannister broke the four-minute mile.
• Until this record in the 1952 Olympics, the thinking was that no human being could run the mile in under four minutes
• Many believed that the physical limitations of human body could not support a sub-four-minute mile
• Just 46 days later Bannister’s record was broken
• Since then, numerous runners have recorder times under the four-minute mile barrier
• The deduction is that the four minute mile was a mental barrier and not a physical barrier

With the four-minute mile as a backdrop, Dr. Wind pushes forward with two overarching themes for his presentation:

• Lines are blurring between B2C and B2B marketing

• It’s important to develop organizational processes to learn from the B2C world in a systematic way

Specifically, Dr. Wind advocates seven rules for the changing B2B environment:

RULE 1 – Challenge the Isolation of the B2B World and Learn from the B2C World

There are huge opportunities for B2B to learn from the B2C world. B2B employees live in a B2C world outside of work and these worlds have been colliding and will continue to do so. In 2001 a hybrid consumer study revealed that consumers wanted to be part of a community, the ability to call, click or visit companies and the tools to help them make better decisions. An example in the B2C world is priming, a technique successfully used in supermarkets. Case in point: when a supermarket wants to sell more French wine, they play French music in the wine section.

Does your organization have programs are in place for B2B Marketers to learn from the B2C world?

RULE 2 – Engage Empowered and Skeptical Customers as Partners

It’s important to engage customers as partners and design messages, brochures and advertising for viral distribution. Viral distribution demands a different way of designing marketing programs. The underlying premise is to let customers do the work by utilizing their networks. . The basic rule of thumb when designing programs for viral distribution should be “If they will not share it, I will not air it.” Engage customers as designers.

RULE 3 – Adopt Open Innovation and Use Expertise Outside of a Specific Discipline to Solve Problems

Crowdsourced innovation pioneer Innocentive, the “eBay of innovation” with over 200,000 scientific problem solvers around the world) has adapted an open innovation philosophy. Case in point: Proctor & Gamble has several technical problems that could not be solved internally due to bandwidth and expertise. P & G embraced open innovation by posting those problems on Innocentive, allowing them to engage with some of the brightest minds in the world. The result? A 40% success rate of the solutions that were  proposed.

Many companies today believe that aligning the discipline of the problem solver with the problem will yield a higher likelihood of success. The implication is that whenever companies recruit people with deep levels of understanding about a specific topic it always leads to the best outcomes.

However, this is frequently not the case.

Problems may need to be solved outside of a discipline. Research has shown that many problems are best solved from people outside a discipline. No company can afford to hire all of the available expertise within a particular domain. Innocentive proved that companies do not have to try to hire all of the expertise in the world to solve all of their problems. Granted, this was in R&D, but open innovation applies to all functional areas.

Successfully orchestrating the network is key as it fosters specialization or segmentation. Companies should create the ecosystem, roles, rules and procedures to orchestrate multiple participants in order to promote and adopt open innovation. What is not being said is that in-depth knowledge is not necessary. What is being said is that the challenge is in bridging disciplinary silos. Bridging the silos or network orchestration is critical for the long-term success or a company. What is the best way to leverage the outside world? Regardless of their actual job, people should think of their primary role as a global, virtual network orchestrator.

RULE 4 – Focus on Customers and their Clients

Are the companies’ strategies centered on its customers and their clients? A typical marketing approach is to ask who the customers are and define their needs. The next step then is to determine the logical product and services offering which will create the desired customer experience. Based on this information, it’s critical to determine the strategy, programs resources, capability, and processes needed to effectively deliver the solution and provide the desired experience. This is a much different approach than the “Here is my product, who can I sell it to?”

Market strategy needs to cascade down to include account strategy. Account strategies need to be developed for each account in a B2B world – i.e. understand what needs to be done and build the strategy around it.

In the B2B world, this is not enough. Rapid advancements in scientific and technological development are changing the needs, solutions, customer experience and supporting functions. In B2B, companies must replicate this process for the customers of their customers. In fact, it is crucial to have two sets of strategies: one for the customer and one for the customer’s customers. Having these insights is critical for B2B companies to provide effective solutions to their customers.

How does the ultimate consumer of your product feel?

RULE 5 – Don’t Be Satisfied with the Current Solution – Innovate

How innovative are your company’s strategies and have you challenged the “Mental Model” of its industry? These are the questions to ask if an organization wants to innovate. 3M adopted an interesting approach – i.e. doing anything legally and ethically that upsets the status quo or changes the rules of the game increases 3M’s value to their customers. Further, it results in a novel and competitive advantage that is difficult for the competition to respond to.

The leaf criteria are well-known criteria for evaluating strategies and activities that will change one’s life. It provides an innovation premium by helping to change the ability to innovate and it change the mental model of one’s industry.

Other questions to ask include:

• Is your company fulling integrating interactive marketing communication strategy focused on the story created through all touch points?
• Are the evolving needs of the consumer as well as the needs of the business incorporated in a creative story delivery?
• Is your company really challenging the status quo?

Even though there may be a solution to a problem, why not challenge the existing solution to find a better one? Often times, companies get so comfortable applying the known solution that they stop thinking creatively to find new, different and better solutions to problems.

One such example of thinking creatively is illustrated by Customer Management Relationship (CMR) versus Customer Relationship Management (CRM). . CMR refers to an empowered consumer and CRM to an empowered company which relies on data to better serve the customer.

American Airlines (AA) is an example of a CRM company. Years ago, AA established the Sabre System as a single platform for travel agents worldwide to do business with them and their customers. Incredibly, at one time, the value of the Sabre System was greater than that of the entire AA fleet. The challenge for AA was to develop a platform that customers could use to interact with AA as well as AA’s competitors. The advantage was that AA was the entity that provided the platform for the interaction..

RULE 6 – Challenge the Mental Business Model

In 2010, IBM conducted a study of 1,600 global CEOs about their perceptions of changes in the new economic environment. The CEOs stated that they expect the new economic environment to be:

• More volatile (deeper, faster cycles, more risk)
• More uncertain (less predictable)
• More complex (multi-faceted, interconnected)
• Structurally different (sustained change)

The CEOs also stated that their companies were not equipped to deal with this changing world.

The study found that the most successful companies before and after a crisis had three characteristics in common:

• They embodied creative leadership
• They reinvented the customer relationship
• They built operating flexibility

It’s important to ask whether one’s organization has challenged its mental business models and considered the implications of the advances in technology.

RULE 7 – Adopt the Adaptive Experimentation Approach

It’s important to ask if your company has adopted the Adaptive Experimentation Approach. This approach means developing and testing multiple strategies versus a single strategy. Pursuing a multiple strategy approach provides several potential outcomes — and it is those potential outcomes that will reveal what to do. Multiple outcomes provide comparison, insight and choice.

Some Parting Thoughts for B2B Marketers

In today’s environment, there is no silver bullet nor will any single optimum strategy last forever. The way that one learns and improves is by adapting the concept of adaptive experimentation on an ongoing basis. The benefits of this will be:

• Better learning
• Better decisions
• Encouraging innovation (create a culture of innovation)

An added benefit of the adaptive experimentation approach is that it impacts the culture. The minute experimentation is promoted and everyone knows that not every action will be successful, an “OK to fail” message is disseminated within the organization. Those organizations that do not encourage failure consequently do not have a culture of innovation.

The best advice is to continue to learn, test and adapt and to leverage all go-to-market resources available.

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