Professor Ravi Shanmugam

MKTG 551: Marketing Analysis and Decision Making

Class 10: B2B Buyer Behavior

Laura RamosVice President, Industry MarketingXerox Global Services, NA

October 20, 2010

Laura Ramos

Vice President, Industry Marketing• Xerox Corporation, Services Group• Forrester Research VP, 9 years• Stanford BSME, Santa Clara LSB MBABackground• Stratify, Verity, Vitria, Resumix, Sybase, Tandem• Director Product Marketing 10 yrs• Before then: software and hardware program management and

product development for 10 years• Blogger: www.b2bmarketingpost.com

• Follow me on Twitter: @lauraramos

Agenda

What is B2B marketing and how different than B2C?Why must B2B marketers know their buyers?What are the fundamentals of understanding B2B buyer behavior?• Segmentation• Profiling• Personas• “Behavior”-graphicsFinal thoughts and questions

B2B Marketing definition

► Marketing activity performed at firms that sell high-involvement products to other businesses through a direct sales force.

B2B marketing circa 1990: what we did

Events

PromotionsPR

Advertising

What do B2B marketers do today?

Source: Forrester Q1 2009 B2B Marketing Budgets And Tactics Online Survey with MarketingProfs

“Which of the following marketing tactics does your marketing organization use?”

Base: 317 B2B marketing professionals

What do B2B marketers worry about?

Source: Forrester’s Q2 2006 Business-To-Business Marketing Effectiveness Survey

Base: 569 B2B marketers (multiple responses accepted)

“What are your top five B2B marketing challenges?”

Allocating the marketing budgetImproving relationship with sales

Improving partner relationshipsRetaining customers/developing loyalty

Understanding prospect behaviorImproving data quality and availability

Increasing product awarenessDeveloping the company’s brand

Deepening relationships with customersWorking within budget constraints 40%

40%37%37%

28%27%

25%21%

20%16%

Generating more leadsImproving lead quality

Measuring marketing resultsReaching decision-makers 54%

53%48%

44%

What does this mean?

The explosion of new marketing tactic choices overwhelms marketersGet caught on the execution treadmillSales gets in the middleLose sight of impact marketing has on buyerMarketing seen as a cost center, not a source of business valueB2B CMO tenures hover around 26 months

To reach decision-makers, generate qualified demand, and demonstrate Marketing’s value to the business

– know your buyer and how they buy

Marketing must know and manage the buyer’s journey

Source: Forrester Research, January 15, 2009, “How To Avoid B2B Marketing Obsolescence ”

It’s key to choosing where you play in the market

Strategic overview Choosing value Providing value

• What can we do?• What do we do

now?• Where’s the

opportunity?

• Define market• Segment market• Position offerings• Design mix

• Execute in market• Analyze results• Refine• Expand

First of a 4-step process to set marketing strategy

POST

People Assess customer profile and activities

Objectives Decide what you want to accomplish

Strategy Plan for how relationships with customers will change

Tactics, Tools, Technology Decide which marketing approaches to use

Agenda

What is B2B marketing and how different than B2C?Why must B2B marketers know their buyers?What are the fundamentals of understanding B2B buyer behavior?• Segmentation• Profiling• Personas• “Behavior”-graphicsFinal thoughts and questions

How do you “know” your audience?

► Segment: homogenous group that behaves in the same way or has similar needs, distinct from other segments.

► Segmentation: “who you want to talk to” — separate from targeting and positioning.

► Persona: a representation of a real audience group. Includes a user’s context, goals, pain points, and major questions that need answers — “what you want to say to them.”

1. Identify and prioritize target accounts using analytics Segment and profile

existing customers Identify look-a-likes Prioritize non-customer

opportunities Perform data assessment

5. Qualify opportunities & enable engagement Lead scoring Time triggers Corporate relationship

mapping Telequalification: ID role, BANT

2. Account intelligence planning Account /

Company information

Develop contact data

Integrate with salesfore automation

3. Segment & identify opportunities within accounts By offerings, needs,

roles, functions Competitive contracts

4. Generate demand • Market awareness and education Cultivate contacts within accounts By industry Retain and grow Competitive switching

Analytical EngineCustomer data integration

External dataQualitative dataMeasurement

Analytics to Action at XeroxAnalytical insight and fact-based marketing enhances sales pipeline and productivity

What is a persona?

A model of user goals, attitudes, and behaviors Distilled from observing real people Presented as a vivid, narrative description Of a single “person” who represents a customer segmentUsed consistently throughout the decision making and design process

Goal: Reduce many users to a handful of user models by capturing critical user attributes while leaving out irrelevant attributes

Analyze customer purchase history, interviews, sales meetings, etc. to uncover clusters of key attributes

Source: InContext Enterprises

It doesn’t have to be that complex!

Source: InContext Enterprises

Identify similarities to reduce persona complexity

Create personas based on attributes relevant to purchase decision-making

Carl the Coordinator

“I have to focus on the big picture – I need a partner that understands my supply chain.”

Seeks to stay on top of operations performance Prefers direct communication

Needs customized solutions

Personal Profile As Logistics Director, Carl ensures that things run smoothly and supplies are distributed to construction sites. Carl has clear ideas about how shipping should run and he expects his shipping partner to share that vision. When he switched to our firm nine years ago, he wanted a partner with the capabilities and responsiveness to help him manage his supply chain. We stepped up to the plate by understanding his business and making solid recommendations, but ultimately, the success of each project is a direct reflection of Carl’s ability to manage all aspects of the supply chain.

Carl occasionally uses <tool>, but relies on representatives to provide customized reports and answer questions. The nature of his business calls for detailed, up-to-the-minute information that canned reports just don’t provide. He doesn’t ask for this kind of service on every shipment – just the critical ones. He knows he’s a bit demanding – but as a preferred customer, he feels entitled to a certain level of personalized service.

Carl wants us to acknowledge his high volumes across channels and provide better rates and visibility. His experience with the web site and tools has been hit or miss. He wishes he could get comprehensive information and set up customizable reporting templates that could be saved and easily altered to meet his needs. He wants access to electronic copies of international documents from the online tools rather than requesting them from the local office and waiting for a copy to be faxed to him. For routine communication, Carl prefers emails (ideally from his representative) for efficiency, but when urgent issues arise, he wants to know there’s a voice on the other end that is working towards a solution for him.

User Goals When Carl visits the site, he wants to…

Leverage the tools to manage and improve the company’s supply chain

Access detailed information and specifications about services and capabilities

Receive customized reports about freight operations cost and efficiency performance

Use the tools to collaborate with the local representatives and his staff

Business Objectives We want Carl to…

Utilize the web tools for information rather than relying on the local office to provide it

Register and log in when he uses the online tools

Use the web tools for routine reporting

Recommend the online tools to his staff

Become aware of key tools and service

Personal Information Profession: Director, Global Civil Engineering Company

Location: Baltimore, Maryland

Age: 42

Marital Status: Married

Personality: Assertive, no-nonsense, out-going

UPS Shipping Information Years with firm: 9.4

Products / Services used: xx

Tools used: xx

Competitors used: xx

Knowledge: High

% of day spent on tasks: 24%

Internet Usage Internet experience: Intermediate - Expert

Primary uses: Email, news, banking

Favorite sites: MSNBC, AMEX, Google

Hours online per week at work: 25

Hours online per week at home: 14

Shipping Information

A large part of my job is just keeping things running reliably and securely, but my main goal is making sure our technology and applications align to our business priorities. This can include cost reduction, making our workforce more efficient, or rolling technology into services our customers will pay for.

I’m a strategic business person who understands IT, but that doesn’t mean I want to become an expert on your speeds and feeds. I got to where I am by being a strong generalist and applying my management skills from one role to the next. I rely on the people working for me to evaluate vendors. In fact, I may not have even heard of you if you’re not IBM, Cisco, Microsoft or Oracle. I will only approve your inclusion in any major RFIs if you’re reputable and stable.

I don’t want to hear about your products. I need to understand how you will help me create competitive edge for my business -- while understanding the risk/cost drivers.

I don’t interact with vendor sales and marketing teams. They’re fended off by my gatekeepers. If my team recommends a vendor I haven’t heard of, I deeply value the direct experiences of my network of analysts and my industry C level peers. I want to know if you’re stable, trusted, and have proven customer references. If everything checks out, then I may approve a vendor for testing in our environment with our data. If the technology is good (and by good, I mean proven) and fits a our business need, that’s great. But I also need to know the vendor has the headcount and services to support us during and after implementation. I don’t take ‘unnecessary’ risks and lean toward established companies with sophisticated service and support offerings.

Age: 52

Chief Information OfficerLarge Enterprise, Inc.

My Role My Work Life

The Strategic Risk Manager

My Motivations

Proof• You do the math, I’ll check the

answer• Business-case driven• Looks for measurable value for

justification

Reassurance• Wants recommendations from fellow CIOs• Consults with analysts on major

implementations• Prefers high-level introductions with

potential vendors

Media & Information Touchpoints

Business

Technical

Now Future

Focus

My Goals• Align IT to business priorities• Control costs and maximize

investment• Make IT a strategic asset and

provide a competitive edge/advantage to the business

• Simplify processes and operations• Keep up with macro-trends in IT• Make it easier for our customers to

do business with us• Achieve/maintain regulatory

compliance—mitigate security risks

My Frustrations• Negotiating the terms of global

implementations• Educating my team on the business

issues, when they focus more on the technology

• Shrinking budgets in the face of needing to do more

• The CEO or CFO doesn’t always understand technology’s impact on the business

Europe

“I want to make strategic investments in IT that support the vision for the company and build competitive edge.”

The CIO/CxO

Agenda

What is B2B marketing and how different than B2C?Why must B2B marketers know their buyers?What are the fundamentals of understanding B2B buyer behavior?• Segmentation• Profiling• Personas• “Behavior”-graphicsFinal thoughts and questions

Buyer behavior example: Understanding social behavior

The Social Technographics® ladder

• Groups include people participating in at least one of the indicated activities at least monthly.

• *Conversationalists participate in at least one of the indicated activities at least weekly.

• Publish a blog• Publish your own Web pages• Upload video you created• Upload audio/music you created• Write articles or stories and post them

• Update status on a social networking site* • Post updates on Twitter*

Creators

Critics

Collectors

Joiners

Inactives

Spectators

Conversat-ionalists

• Post ratings/reviews of products or services• Comment on someone else’s blog• Contribute to online forums• Contribute to/edit articles in a wiki

• Use RSS feeds• Vote for Web sites online• Add “tags” to Web pages or photos

• Read blogs• Listen to podcasts • Watch video from other users• Read online forums• Read customer ratings/reviews• Read tweets

• Maintain profile on a social networking site• Visit social networking sites

None of the above

Source: Forrester Research, April 28, 2010, “Social Technographics®: Business Technology Buyers”

2010 US adults 2009 B2B tech buyers

2010 B2B tech buyers

24% 43% 49%

33% — 37%

37% 58% 65%

20% 48% 57%

59% 55% 73%

70% 91% 95%

17% 5% 2%

North American And European B2B Social Technographics® Online Survey, Q1 2010North American And European B2B Social Technographics® Online Survey, Q4 2008North American Technographics® Groundswell Heroes Online Survey, Q4 2009

Conversa-tionalists

Creators

Critics

Collectors

Joiners

Inactives

Spectators

Technology buyers are socially active

Source: Forrester Research, April 28, 2010, “Social Technographics®: Business Technology Buyers”

Peers influence purchase decision making

3%

4%

4%

4%

4%

8%

8%

12%

16%

21%

21%

22%

33%

39%

60%

Blogs

Virtual trade shows or virtual conferences

Search engines, paid search ads

Web based events, Webinars, Webcasts

Interactive media: podcasts, video, online demos, RIAs

E-mail or electronic newsletter

Social networking sites (Facebook, LinkedIn)

Discussion forums, support sites

Industry analyst firmsVendor, industry trade, or professional Web sites

Consultants, VARs, or SIs

Your vendor salesperson

Industry events, trade shows, or conferences (in person)

Technology or business publications, magazines

Peers and colleagues (word of mouth)

Which 3 information sources had the greatest impact when deciding your last purchase?

Base: 1,011 business decision makers at firms with 100 or more employees in the United States and EuropeSource: Forrester's North American And European B2B Social Technographics® Online Survey, Q1 2010

Align buyer behavior to business objectives

Social Objectives Functional Alignment Success metrics

LISTENING Research•Customer insight•Improved segmentation•Reduced pain; alignment of offering with need

TALKING Marketing, education•Changes in reach, impressions, brand awareness•Increased share of voice•Higher quality of responses to offers

ENERGIZING Sales•Increased velocity of messages in market•Increased recommendation, promotion, advocacy•Higher trust, brand trust perception

SPREADING Professional services•Faster deployments at new customers•Existing customers create new business capacity

SUPPORTING Customer service, technical support

•Reduced support costs•Higher customer satisfaction•Less churn

EMBRACING Development, product marketing

•Deliver products faster to market•Increased loyalty, increased advocacy

Source: Forrester Research, October 21, 2008, “Making Social Media Work In B2B Marketing”

Know how to engage buyers across decision process

1. Problem recognition

2. Information search

3. Evaluation of alternatives

4. Purchase decision

5. Post-purchase behavior

Final thoughts

Know your customers, and how they buy, to make smart marketing strategy and execution decisionsWhat business buyers “do” is as important as “who” they are

Questions? and Thank you

Laura Ramoslaura.ramos@xerox.com Twitter handle: @lauraramos

Post-Class Assignment:

Visit my blogwww.b2bmarketingpost.comand write a (short) comment about this class content, share your thoughts on B2B buyer targeting, or ask a question after reflecting on our discussion.

Feel free to visit:www.facebook.com/managingprint www.consulting.xerox.com/