I’ve been actively writing and presenting over the last few months on the changing B2B marketing landscape. And I’ll be talking more about this subject throughout the Fall at the B2B Marketing University series that I’m hosting together with my colleagues at Silverpop (please join us).
A great deal of the focus of my dialogue so far has been on the evolution of marketing technology, but it’s impossible to talk about a changing environment for marketing technology without talking about how the nature of the B2B buyer also is rapidly changing. The two are inextricably intertwined in a new reality that is both a cause and effect of the digital age we live in.
But where is the hard data that this evolution is really occurring? We’re changing how we go to market — and there is plenty of data pointing to shifting spending by marketers — but how do we know that our shifted spending will better align with B2B buyers’ shifting needs and preferences?
There are quite a few data points that support this evolution; however, they’re often difficult to unearth. Often they are buried or confused within consumer-focused studies on buying trends, and sometimes the consumer data even contradicts the B2B reality. Marketing technology analyst and author David Raab hit on this in a recent round-up of many of these ‘mixed’ consumer/B2B surveys on his Customer Experience Matrix blog. And a major call-out from his piece was just this discrepancy: “Many [data points] are contradictory …,” commented Raab.
So how do we better articulate the unique and changing nature of the B2B buyer — separate from the broader consumer perspective? How do we nail down (real) evidence that the nature of the B2B buyer has changed?
Given the importance of these data and insights to my work, I spent some time updating my perspective to make sure that as B2B marketers we’re on the firmest ground possible. It’s critical that we really understand in an accurate and granular way how best to address the ‘brave new world’ of B2B marketing that I believe is emerging. The good news is that in the process I ran across some very interesting studies and insights, which I’m happy to share.
So first I’ll tackle a definition of how B2B buying behavior has changed, and then I’ll present data points from cutting edge research on the topic I believe illustrates this new reality.
What exactly is the change that has occurred in B2B buying behavior?
As a starting point, let me say that I believe the fundamental buying cycle — i.e., the stages buyers typically go through to make a decision — has not changed. I talked a bit about this in a recent blog post on the Silverpop Demand Generation Blog via the concept of ‘Customer Centered Selling’ that former (and legendary) XEROX sales trainer Robert Jolles has written about.
I still believe this cycle exists, in perpetuity; however, as I outlined in the Demand-Gen blog piece, when and where buyers engage with in-house sales and marketing resources versus external resources is what has fundamentally changed.
In fact, the last decade has brought a rapid (r)evolution in the alignment of resources and power — something I detailed in a recent guest piece on the ReachForce blog:
There are many challenges facing B2B marketers today, but they are almost all traceable to one inflection point — a fundamental, Internet-age shift in power that has taken place. Today, the B2B ‘buying unit’ has immense information-based resources at its disposal. Couple this with a corporate accountability and transparency mindset, and the result is a B2B buyer that is now calling the shots … not the B2B vendor.
The implication is a new B2B marketing dynamic that demands responding to customer ‘pull’ over a traditional marketing ‘push’ mentality. …
Buyers increasingly set the ground rules on when and where they will engage. Buyers also increasingly turn to trusted third parties for education, not sales people … whom they engage as an almost final stage in their process. This means B2B marketers must focus heavily on ‘getting found,’ nurturing prospects and managing pre-sales buyer dialogue.
This is a critical re-framing of the B2B buyer/seller relationship. Much has been written about how sales and marketing strategy is evolving — becoming more sophisticated via CRM and marketing automation. Yet this is not an asynchronous evolution, and buyers are setting the pace … and getting ahead of sales and marketing organizations.
This is something that SiriusDecisions — an analyst firm that covers innovation in sales and marketing strategies — further clarified in a recent post on their corporate blog:
Buying 2.0 is a better metaphor for the buying/selling interactions of today’s selling environment as the hunter has become the hunted. Buyers are more informed and seek information independent of sales. Buyers have access to overwhelming amounts of information, but seek intelligence they can trust to support their decision making process. How sales people want to sell has little impact on how buyers are choosing to buy.
What is the evidence that the nature of the B2B buyer is changing?
To answer this question, I spent some time reviewing recent research and reports by a number of firms that cover B2B marketing. Below is my major synthesis of the dynamics that define this re-shaped B2B buyer nature, backed up by studies I think help us better believe in these dynamics.
> B2B buyers are increasingly turning to online sources, earlier in their process, to research purchases before ever calling a ‘live’ sales rep: There’s a lot of evidence that the B2B buyer is using a variety of channels to access industry peers’ insights — insights that will ultimately shape their buying decision — via Internet-based/virtual mechanisms. This speaks not only to the rise of social media, but also to that of other forums, such as virtual trade shows.
“[T]he poor economy has forced a shift away from face-to-face events and trade shows, and toward their virtual or online counterparts,” explains Bill Gadless in a post on the B2B Web Strategy blog that summarized a recent research report by MarketingSherpa.
This “2009-10 B2B Marketing: Benchmark Report” by MarketingSherpa, which interviewed technology buyers who make purchases greater than $25,000 (i.e., large, consultative purchases), highlights the significant and increasing usage of online mediums by B2B buyers versus traditional media and/or face-to-face events. The chart below (used with permission) points to this trend:
The MarketingSherpa data speak to a new preference for online. Additional research from Enquiro highlights how early in the B2B buying process online sources are now consulted — shaping early perceptions.
Enquiro recently launched a project it is calling The Buyersphere Project, which is focused on capturing the changing nature of the B2B buyer. As part of this project, Enquiro published a white paper, titled “Integrated Persuasion: Online and Offline,” that further supports this point:
It seems that it’s common to take to partially defined need and flesh it out through online research. Therefore, online can be a powerful influence at these early stages. The result of the research is fundamental in determining potential candidates, defining comparison criteria and formalizing the purchase plan. It’s important to understand that although this research happens early, there is typically already at least one vendor that’s embedded the consideration set, a seed planted there either by past experience, approved vendor status or marketing. This existing vendor mindshare can influence the online resources consulted, the words used in web searches and the vendor websites visited. Online research confirms their position and adds other candidates.
The Enquiro white paper illustrated this reality via the following graph (used with permission), which captures the ongoing role of online — especially at the earlier stages:
> B2B buyers are increasingly leveraging social media — especially peer communication, such as Twitter, blogs, etc. — in the information collection phase of the buying process: Not only are B2B buyers increasingly turning to online sources, but they are seeking via the online world the same types of peer references and word-of-mouth they have always relied upon. This is where social media is playing an increasing role in the B2B buying process.
David Raab recently noted on his Customer Experience Matrix blog, “[S]ocial media have grown from virtually nothing to nearly 20% of online time over the past few years. This matters because social media are an alternative gateway to finding Web content: Instead of doing a search, I can ask my online community for information or recommendations.”
A 2007 Forrester / Erickson Barnett white paper noted of B2B buyers, “[W]e found this group to be 1.3 times more likely to engage in social media activities for business purposes than for personal.” The paper also reported that “[w]hile 44% of adults, according to Forrester, have no participation in social media, only 9% of the B2B marketers who responded [to the survey] were inactive.”
More recently, Laura Ramos and Oliver Young with Forrester’s Technology Industry/B2B group, published a very interesting report titled “The Social Technographics of Business Buyers.” (See Forrester-posted SlideShare presentation below.) They interviewed “more than 1,200 technology buyers in the U.S., Canada, France, Germany and the U.K. with 100 employees or more in seven major industries,” according to Ramos in a BtoB Magazine write-up of the top-level research findings.
Josh Bernoff commented on these report findings via Forrester’s Groundswell blog: “91% of … technology decision-makers [are] Spectators — the highest number I’ve ever seen in a Social Technographics Profile. This means you can count on the fact that your buyers are reading blogs, watching user generated video, and participating in other social media. Note that 69% of them said they were using this technology for business purposes.”
> B2B buyers are pursuing their buying process more ‘massively multi-channel’ than ever before; however, channel weightings and their sequence vary by the phase of the buying process: “Unlike consumers who tend to lean more strongly one way or the other, the B2B buyer tends to now converge channels into an integrated buying cycle and process. And, I bet confusing the heck out of many marketing departments,” commented Tony Zambito in a post on his Buyer Persona Insights blog earlier this year.
This is absolutely the new reality of B2B buying, and it is both multi-channel online, as well as a blend of online and offline data gathering.
Enquiro released research in 2007 that points to some of this pattern. The chart below (used with permission) captures shifting emphasis on different mediums over the life of the B2B buying cycle, but what is noteworthy is that all mediums are consulted in parallel at all stages.
The Enquiro chart also hints at the sequencing of channels in the buying process — something Akin Arikan covers in his book, Multichannel Marketing. He makes some great points about maintaining focus and control in a multi-channel marketing environment. “[I]t is one thing to interact through multiple channels in parallel,” comments Arikan. “It is quite another to fuse those activities together in an intelligent way to maximize response and conversion rates.” Akin goes on to point out that today “[b]uyers are multichannel beings. Buying cycles are cross-channel.”
> B2B buyers manifest themselves more than ever as a complex, savvy ‘buying unit,’ rather than simply as a single decision-maker: Not only are B2B buyers integrating multiple online and offline channels and opinion sources, but they also are operating in a more sophisticated fashion than ever. A big-ticket purchase will be evaluated by a team of people, ranging from the initial recommender, to someone making the business case, to a purchasing agent, to legal/finance/etc. It’s a complex process to navigate.
“Relationship marketing is the key here and different levels of the organization participate in the buying/selling process especially if the sale is a big ticket sale,” commented Lowell D’Souza in a recent post on his Marketing Bones blog site.
Enquiro highlighted this in another white paper, ” Maximizing Online: Leveraging Your Online Touch Points,” that further supports this point. Enquiro points to differential involvement of end users — who may have made the initial business case for a purchase — versus those in the procurement group — who are responsible for assessing and negotiating a purchase. This can be seen in the chart below (used with permission).
So what is the impact of all of this change in the nature of the B2B buyer on B2B marketing and on sales and marketing alignment? The most significant impact is the death of the traditional sales funnel and a new approach that must be embraced by B2B marketers — an approach I’ll cover in a post on the Silverpop Demand Generation blog later this week.