A Case Study in B2B Marketing

We as a profession use many expressions, explanations and metaphors to define what we mean when we describe our idea of an effective value proposition. Just some examples which I am accustomed to both hearing from other marketers and telling my own clients in answer to the question “What is a value proposition?”:

• A statement that outlines the unique value you provide to your customers
• A statement that aims to convince a prospect that he should choose your product or service over someone else’s
• A statement of the specific benefits or results a customer can expect from using your product or service
• A statement that differentiates your product or service from your competition
• A statement that directly addresses a customer need or problem, and offers a solution
• A statement that encompasses how your product or service does all of the above BETTER, FASTER, and/or CHEAPER.

These bullet points simply represent some different ways to express the point or the goal of a value proposition, or the definition of value proposition. Let’s look at a real proposed value proposition from a company that shall remain nameless.

“Our state-of-the-art thermal cyclers are the best choice for clear PCR runs every time.”

Right out of the gate, this attempted value proposition has some positive features that tackle the goals of a value proposition. First, it states what a thermal cycler does: PCR. Second, it addresses a problem that thermal cycler users face, which is “unclear” PCR runs. However, it falls short in some other ways. First of all, state-of-the-art is not a word that differentiates our thermal cycler manufacturer from any of their competitors nor does it give any specifics to why their equipment is better, faster, or more cost-effective than any other thermal cycler choice.

What can be done to improve this value proposition? Let’s cover what to do and what not to do. Do not make your value proposition into a list of features; for example, features like a motorized lid, interchangeable block models, or a certain plating metal on the chamber do not belong in the value proposition for a thermal cycler. Instead, the focus should be on what problems those features solve for the customer, or how those features benefit the customer’s process, such as the speed of a single PCR cycle, or the yield repeatability. Most importantly, this value proposition should impart to the customer the belief that whatever problems or struggles they have had with PCR machines in the past will be minimized or eliminated by the product you are advertising. Again, this involves knowing and understanding your customers’ problems and needs to such a degree that you can come up with solutions. Next, emphasize the speed and cost-effectiveness of your product. Instead of state-of-the-art, get specific with words like “fastest,” “most cost-effective,” etc.

So, here’s a stab at a more effective value proposition for our thermal cycler client:

“The BrandX thermal cycler, twice as fast as our previous model and extremely cost-effective, provides the most repeatable PCR results every time.”

How would you improve on this second iteration?

Objective, Solutions-Based Consumer Motivation Value Proposition Example

Now that we have outlined a solid working idea of value propositions for marketing of consumer products or services that have subjective purchasing motivations, we now have one final corner of the buyer motivation triangle (B2B; B2C objective motivations; and B2C subjective motivations being the three sides of the triangle) to explore more in depth. A value proposition model that addresses consumer product marketing for products that have an objective, need-based or solutions-based purchasing motivation involves similar concepts and strategies, but again a few small tweaks have to be applied

In essence, this third side of the triangle can be thought of as a combination of the B2B and first B2C model (subjective motivations), leaning towards the former. Like in the first B2C model we discussed, your client is a consumer buying for themselves, so they are accountable only to themselves (and maybe family) in terms of purchasing decisions, which is not the case in B2B marketing. Conversely, your consumer does share something with the B2B purchaser in this case, which is the objective or utilitarian motivation for their purchase.

So, how to combine these two value proposition models to create a balance that fills the niche of value propositions for consumers with need-based buying motivations? There is certainly strategic and conceptual crossover in the value proposition models for the three sides of the buyer motivation triangle, but also some factors that are only applicable to each individual model.

Let’s look at a specific example. This one is contrived, I’ll admit, but it closely mimics attempted strategies I have seen for myself. Besides, I don’t want to run out of clients that will let me use their first attempts at marketing material online too early in the life of this blog, and we’re just getting started! Let’s say that you, as a marketer, were presented with the following as a top-level slogan/value proposition for a ceramic knife product:

“Looking for the best value in kitchen knives? Try our popular ceramic knives, new to the U.S. market!”

Unfortunately, there is a serious lack of value-added information in this proposed value proposition. First, it does not do a few of the most important parts of what we strive to do with our B2B value proposition model, which is that:

1. It does not address the customer need from the perspective of the customer’s problem, that is to say it does not tell the need-based buyer what need the product will fill or what problem it will solve, exactly.
2. It does not differentiate itself specifically from other products that serve the same general purpose, for example traditional stainless steel knives.

Don’t forget though that we are still talking about an individual consumer that answers only to themselves, and therefore to their own values, in making purchasing decisions. Therefore, some of the factors your value proposition must take into account are the same as those in the first B2C value proposition model addressed here. The individual consumer might value the way something looks aesthetically in their kitchen, how it feel in his/her hand, that it will impress their neighbor, etc. Furthermore, the individual consumer is often looking for products with the maximum diversity of application, not just the optimal solution to one problem.

Now combine the need for a solutions-based value statement with some more subjective motivations and varying needs, and you should get something that is better suited for the solutions-driven, a.k.a. objective motivation B2C value propositions model:

“Always-sharp ceramic kitchen knives do the job of multiple specialized knives, perfect for cutting everything from bread loaves to tomatoes to raw carrots. They are ergonomically designed, have a sleek modern look, are economical, and will never become dull like metal knives.”

Longer, yes. Also more effective. Shorter slogan versions can easily be made out of this value proposition, but the full two sentences get the value across in a much more complete package.

With B2C Realities/Consumer Motivations

As discussed, the motivations behind personal consumer decisions in B2C situations or consumer products marketing can be vastly different from the motivations behind business consumer decisions. This said, the strategy behind building a B2C value proposition requires a large adjustment in mindset from the point of view of the marketer. We must therefore redefine our value proposition model that was outlined in an earlier post and oriented towards B2B marketing to try to take into account some of the subjective factors that play much more into B2C business than they do into B2B business. How can we conceptualize value proposition in the B2C category? Let’s dissect the concepts of a B2B value proposition model and work out the differences:

• A statement that outlines the unique value you provide to your customers—This still holds in B2C marketing, with the understanding that “value” is defined differently. We must therefore establish a different definition of value for B2C marketing,
• A statement that aims to convince a prospect that he should choose your product or service over someone else’s—Still true in competitive consumer product marketing, e.g. one brand of laptop over another, but it does not hold across the board, because some individual consumer decisions come down to matters of taste or trendiness.
• A statement of the specific benefits or results a customer can expect from using your product or service AND a statement that directly addresses a customer need or problem, and offers a solution—This particular consideration is not as cardinally important in B2C marketing, because consumer products are not necessarily solutions-driven. Unlike in the B2B environment, a vast number of consumer products do not offer a solution to a problem or challenge. Further discussion is necessary to distinguish when this applies, and I will so in my next post.
• A statement that encompasses how your product or service does all of the above BETTER, FASTER, and/or CHEAPER—This conceptualization of value proposition has some distinct weaknesses in B2C marketing. Shoes and handbag marketing, for example, certainly does not follow this conceptualization. People pay magnitudes more for a handbag based on taste and trendiness, and often actually associate the added expense with a level of prestige.

Having identified the need to define “value” relative to the general consumer, we now have to take a crack at the definition. I will argue that the following is a functional definition of value in B2C marketing:

• The worth and attractiveness of a product as defined in the user’s terms, achieved through a combination between filling a need and creating positive feelings or desire.

This definitions encompasses both objective value—such as things that save time and money—and subjective value—such as which blouse is cuter and which tie is most authoritative.

So, what do we need to add to our conceptualizations in order to make our ideas about value propositions relevant to B2C marketing? By consolidating some of the relevant concepts from B2B marketing and adding the concept of value as it applies in B2C marketing, we get something like the following:

• B2C Value Proposition Definition: A statement that defines your product in terms of its strongest advantages as related to consumers’ objective and subjective perceptions of its value.

B2B versus B2C Value Proposition Definitions

In the general discussions of value propositions and value-added benefits or features, I have thus far focused on B2B sales and marketing. While the conceptual plane and strategy is very similar in developing value propositions in consumer products marketing, the differences between the two deserve some attention. The major difference between value propositions for B2B versus B2C marketing is drive of the customer. In B2B, we can easily define what drives the customer to buy a product, or to buy one product over another. Typically, the driving factor behind a B2B sale is one or a combination of the following: decrease operational cost/drive profit, increase efficiency, or comply with a regulatory or legal requirement. In B2C sales and marketing, these three driving factors may or may not apply, and a virtual Pandora ’s Box of other factors come into play. The general consumer buys for reasons completely other, including—but in no way limited to—personal taste, desire, ego, perceived value, sentimental value, fashion, etc.

An additional consideration is that product interest typically begins with a problem that requires a solution in B2B situations. While this can also be true in consumer products markets, other initial steps on the path of product interest are highly likely as well. For example, a business customer searching for a forklift typically begins his search because he faces a problem or challenge having to do with physically moving palettes or drums of product around a warehouse. On the other hand, try marketing a forklift to a consumer that does not have this problem and no amount of advertising will convince them they need one. Consumer products, interestingly, do not work like this at all. For example, a customer may not be at all aware that lacking the latest fashion in sneakers is a problem until he is reached by an advertiser. Until he sees the product, finds it aesthetically appealing, feels it would boost his image, etc., that customer might not have the perception that he needed new shoes at all. As a matter of fact, the most effective B2C marketers are exceptionally skilled in creating this perception where it did not previously exist.

So, to summarize, the driving factors behind the purchasing decisions of B2B customers are economic or financial at the root, and often originate with a problem or a challenge that is creating less than ideal conditions for profit margin; their purchasing decisions are relatively objectively motivated. The driving factors behind the purchasing decisions of B2C customers can also be financial (value-conscious customer) or originate in a specific problem or challenge, but have other likely driving factors and can easily originate from the advertiser; their purchasing decisions are relatively objectively motivated. In other words, B2C marketing efforts can—and do—create product demand from scratch.

Generally, there is also a different level of education amongst consumers versus business customers in terms of the products they shop. While a consumer product in many cases can be sold purely on aesthetics, low cost, trendiness, or impulse, B2B marketing requires a higher level of substantive value proposition development. For this reason, I reiterate once more the importance of understanding customer problems and environment in the B2B world.

Does this mean that building a strong value propositions is more difficult or more important in B2B marketing than in B2C marketing? Probably, unless you specifically compare B2B marketing to solutions-based consumer product marketing. While B2C marketers have a variety of tools available to them to tackle the various kinds of consumer, B2B marketers must rely on value-added propositions, or propositions that help other businesses run better, faster, cheaper.

Reference: Marketing > Service Marketing and How It Differs from Product Marketing

Value Propositions for Your Reps/Distributors

There is one special case of value proposition model that deserves careful attention from the marketing professional. In an earlier post I touched upon the importance of marketing to your own sales force, especially if all or some of your sales are handled through agents or distributors. When this is the case, special attention needs to be given to marketing strategies that are aimed at your distributors, both the decision makers in your distributor organizations and the individual sales people. This is exceedingly important, because in the typical distributor or representative contract or relationship you are now competing with other companies for the salespeople’s bandwidth, as well the decision makers’ commitment and allocation of local resources to you product.

Just like customers, representatives and distributors have choices in terms of what product they represent or purchase for resale, and how vigorously they pursue opportunities related to your product. In essence, your reps and distributors are just as much your customers as your end users; marketing to both kinds of customer is every bit as important. The strength of your marketing campaigns aimed at your sales force will have a particularly strong impact, because they are your bridge to the customer. Your efforts to market to sales should result in nothing less than your sales force becoming true product champions for you. I will discuss various strategies and models for achieving such results in future blog posts, but let’s first focus on developing a value proposition model to address this special customer segment known as our sales force.

The value proposition model for marketing to distributors and reps most closely resembles the B2B model as defined previously, because the driving factors behind rep/distributor decisions are very similar to those we see in other B2B sales: drive profit or increase efficiency. Ultimately, your rep or distributor wants to devote his efforts to products that yield the highest profit in the shortest amount of time, with additional considerations being quality/customer satisfaction as they influence reputation and repeat business. Our value proposition model, therefore, must consider the same concepts and motivations as our B2B model.

So, why do we need to define value proposition for the rep/distributor relationship separately from the definitions of value proposition we developed for B2B marketing? For one simple and subtle reason: the difference between the standard B2B user/customer and the rep/distributor is what each is evaluating when deciding whether or not to purchase your product, devote bandwidth to it over something else, etc. The standard B2B customer is typically evaluating the ability of your product (and possibly the associated technical support, if applicable) to meet their needs or solve their particular problem in making their purchasing decisions. The rep or distributor, on the other hand, will be evaluating a broader range of criteria when choosing a product to represent or distribute, or when prioritizing bandwidth. Additional criteria that could typically be considered by the rep/distributor customer are:

• sales and technical support
• marketing support
• availability and effectiveness of sale tools you pride
• average delivery times
• average level of customer satisfaction
• the popularity of your brand
• the efficiency with which you distribute commissions
• the percentage of commissions you pay to the representative or agency.

That said, your value proposition for these situations must encompass a broader view of who you are as a company and what you do well. Simply put, make sure the things the rep/distributor values are part of your sales-force-oriented value proposition.

And, of course, I will always throw in topics as they come to me or as I come to realizations about client problems.

Reference: Marketing > Salvage Car Marketing: Direct Consumer Contact Strategy

Defining Value Propositions

In the exploration of various proposition models, we have now discussed value propositions and the differences between them as defined by the drive that catalyzes the customer’s interest and whether the customer is an individual or a business. Within each of these, there is another factor that can be very important in the effectiveness of your value proposition in motivating the potential customer to action (purchase): whether the customer seeks a product or tool to solve one very specific problem or do one very specific thing (single application), or whether the customer is looking for a product or tool that will help with many aspects of their needs (multiple applications). In general, it is true that single application paradigms are slightly more effective in B2B marketing, while multiple application paradigms are slightly more effective in B2C marketing. This generalization is by no means a hard and fast rule, but it can be a helpful starting point for strategizing.

What relevance does this distinction between single application and multiple application motivation to purchase have to value propositions? If your potential customer has a motivation to purchase your product that falls into the single application category (specificity), your value proposition must focus entirely on why your product is best and different for accomplishing just that one thing. If, however, your potential customer has a motivation to purchase your product that falls into the multiple application category (diversity), you must devote at least some of your value proposition to promoting the diversity of applications, solutions, or benefits your product offers. More specifically, a goal of encouraging creativity in how your product can be applied is part of the value proposition model definition in cases where your potential customer’s drive to purchase is based on multiple uses, solutions, etc. that you offer.

Let’s look at two specific examples in order to more clearly illustrate how the diversity vs. specificity factor influences value proposition models. As an example of a single application value proposition, we will look at analyzers that are used by the oil and gasoline industry to quantify sulfur in oil in order to meet regulations that limit sulfur content in automotive fuel. As an example of a multiple application value proposition, we will refer back to ceramic kitchen knives.

The low sulfur analyzer customer needs a product to solve one particular problem in a way that increases efficiency and reduces cost. The value proposition used in marketing such a product, therefore, must focus entirely on how the product will help the customer meet their one goal in the most optimal fashion. For example:

“The TURBOLOW low sulfur analyzer provides fast, extremely accurate analysis of sulfur in petroleum products down to ppb levels. Results in seconds, not hours.”

The ceramic knife customer, on the other hand, is looking for a product that will solve multiple problems or replace multiple existing solutions. The value proposition used in marketing ceramic knives, therefore, must grab the customers imagination in terms of what sorts of sorts of things he can accomplish with the product, especially to replace multiple products he needs to use to accomplish those things currently. Specifically, the value proposition can include solutions to both the problems of too many knives in a kitchen with little storage space and of dull knives. It should also include a list of diverse product applications that will showcase the product’s diversity while also allowing the customer to imagine and extrapolate further uses:

“Always-sharp ceramic kitchen knives do the job of multiple specialized knives, perfect for cutting everything from bread loaves to raw potatoes, from twine to wood carving. They are ergonomically designed, compact, economical, and will never become dull like metal knives.”

Reference: Marketing > A Marketing Challenge: Marketing for an “Umbrella” Company

Subjective Consumer Motivations Value Proposition Example

Having a working concept of value propositions in B2C marketing, we are now well equipped to work out value propositions for specific cases. There is one subtlety left to consider, however. That subtlety has to do with whether we are trying to define a value proposition for a need-based consumer product, or one that is more a matter of taste or trend. How can we better define this difference? Let’s first agree that all consumer products lie on a spectrum somewhere between solutions-based or need-based products that fill an objective void, the ultimate example being toilet paper, and desire-based products that fill a purely subjective void, such as jewelry. A need-based product helps a customer solve a problem or meet a challenge. For example, cooking food is a necessity for most people. While some people do it purely for enjoyment, those that don’t often still do it out of necessity. Therefore, a frying pan or kitchen knife is an object that sits closer to toilet paper on the objective-subjective spectrum. A desire-based product can be defined as a product that has purely aesthetic or sentimental value. So, a charm bracelet or a Pillow Pet is an object that sits closer to the “subjective” end of the spectrum.

How does this spectrum between objective and subjective purchasing motivations influence value proposition? If your product or service is of the objective need type (non-luxury pens, refrigerators, mattresses), your concept of value proposition should more closely follow the B2B value proposition model as described here (see my previous post, as well as other related posts). If, however, your product or service is on the desire-based motivation end of the spectrum (collector’s teddy bears, fashion jewelry, entertainment), your value proposition model now has to take into account some of the following consumer motivations in addition to some of the B2B concepts described earlier:

• Aesthetics
• Ego
• Prestige
• Emotion/Sentiment
• Trendiness
• “Wow Factor”

While this is not an exhaustive list, it gives an idea of the range of factors that come into play in consumer product marketing. Let’s look at a specific real-life example of a professional B2B marketer’s effort to build a B2C product proposition after taking a position in a consumer product organization for the first time:

“Our Christmas window decals are self-sticking, mess-free, kid-friendly, and easy to peel off, making them the perfect holiday decoration for your home.”

Our marketer was surprised when web text prominently featuring this product description was turned down by her boss. I suggested that while the features she listed were valuable, customers looking to decorate their home for the holidays have primary concerns that go beyond the purely utilitarian. The consumers’ associations of peace, joy, and beauty with Christmas—and their desire for those things—must influence the way in which the value proposition is created. Here is her reworked version:

“Our bright, playful Christmas window decals are an easy way to bring the Christmas spirit into your home instantly! Self-sticking and kid-friendly, they spread Christmas joy to your family and passersby.”

Early on, we defined one of the basic tenets of marketing as focusing of clear, strong, unique value propositions. First, let’s define “unique value proposition” as an industry term. There are several “correct” definitions for the term, the difference among them being mostly semantic and a matter of perspective. Unique value proposition are commonly defined in three ways:

1. A statement that outlines the unique value you provide to your customers
2. A statement of why anyone should choose your product or service over someone else’s
3. A statement of the specific benefits or results a customer can expect from using your product or service

While these forms of expression of the definition of “unique value proposition” vary semantically, they all mean more or less the same thing and strive to tell the customer in an efficient and interesting manner why they will achieve better results or solutions to their problems if they use your product or service over that of your competition.

In order to develop an on-target value proposition, you must achieve three things in a succinct statement about your product/service/company:

1. Differentiate yourself or your product or service from your competition
2. Find the one outstanding differentiating factor that makes your product far exceed that of the competition, and highlight it in your value proposition
3. For the aspects of your product or service that are not differentiable from those of the competition, emphasize general quality. In these aspects, show that you meet the industry best practice or standard.

As an added concern, market-specific or solution specific value propositions should be fleshed out based on the overall value proposition you craft for your company. These market, customer, or application-specific value propositions must focus on the specific solutions you can provide to your customers. Communicating the fact that you are highly knowledgeable about your customers’ industry, problems, and needs is essential in building trust and developing unique value propositions. Think about showing your customer that your familiarity with what they deal with best positions you to offer solutions that will work from the get-go. Focus on the ways in which your product or service adds value to the life/work of the customer that purchases it. Note, this is not at all the same thing as focusing on product features, but rather a call to focus on marketing campaigns and collateral that show the customer in no uncertain terms that their problem or desire is understood by you, and that you already know how to solve it.

Once you have identified all these characteristics and unique solutions, how do you craft them into a coherent, cohesive, succinct value proposition? That is the craft of the marketing professional. For practice, make yourself a spreadsheet in which the columns consist of differentiating factors, single most outstanding factors, and industry best practice factors for your product, and then add a column that has to do with the specific problems for which you offer solutions. Combine these columns in various ways to see what works best as a customer-facing value proposition.

Read More…

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• Mobilization: Reaching Outside the Marketing Department
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• Sales’ Feedback into Marketing: Profiling Prospects and Their Problems
• “Inside Marketing”: Marketing to Your Own Sales Organization
• You Are Here Developing Unique, Customer-Focused Value Propositions
• How to Train an Entry-Level Marketing Employee
• When Return on Investment Doesn’t Paint a Full Picture
• Defining and Presenting Value Propositions in a Competitive Market
• Logos and Promotional Product Designs for “Difficult” Subjects
• Defining and Refining Value Propositions for Luxury Items
• Evaluating Return-On-Investment (ROI) for Tradeshow Activities
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