B2B Marketing?

June 2002 Marketing

According to Randy Kobat, Director of Strategic Planning of ADP, in Business-to-Business (B2B) industries, marketing is an important driver of success. For people like him, B2B is believed to be the next big thing in the marketing field. Yet, when I speak to VPs of Sales & Marketing, they often reply that marketing is less than 1/2% of the overall budget. Are these two truths congruent? Yes.

The differences between definitions of the role of marketing within B2B industries disintegrate when asked “How much does a firm spend on Revenue Generation Activities?” Here, sales and marketing teams quickly respond with answers that can reach 40% of the overall business budget. This is indeed a big thing.

Revenue generation is a joint effort of sales and marketing in B2B industries. Throughout the sales funnel or customer lifecycle, sales and marketing work together to build the relationship between customers and the firm. In some areas, the marketing department might lead, yet in most areas the sales department leads. Even in areas where sales departments lead however, they rely upon outputs from the marketing department to enrich the messages that they communicate to their prospects and customers.

Within an unnecessarily restrictive definition, B2B marketing refers to the production of PR, brochures, and web sites in support of the sales process. A broader definition includes not only the business message, but also the creation of its product strategy and corporate strategy. Also, powerful salespeople approach much of their activities with a marketing mind-set.

For instance, consider the sales process. In working the sales funnel and moving prospects from the Universe of Possible Clients to Prospects, Qualified Opportunities, and Booked Customers and Accounts, sales people are performing the marketing activity of Goal Activation, Awareness, Interaction, Transaction, and Relationship Expansion. This is ultimate one-to-one marketing. Each meeting or customer interaction is customized to deliver a message that will drive the relationship forward.

Alternatively, consider the creation of a sales message. Sales people are highly aware that companies don’t buy products, people do. Moreover, people don’t buy features and functions, nor necessarily do they buy because of the logic of the value proposition, but from emotions. In making this statement, B2B sales people are making the same claims that marketing people do in speaking about customer hierarchy of values. In the hierarchy of values, feature and functions are the foundation of benefits and claims that in turn support consequences and high level values such as the need for promotion and self esteem or greater income. I have even seen a sales presentation for a complex business software product making direct references to Maslow’s “Hierarchy of Values” to communicate the sales message.

Sales may own the customer in B2B marketing, but they are supported and informed by marketing. Randy Kobat is correct in stating that B2B marketing is the next big thing, but it won’t necessarily be done by people with marketing titles. Rather, in B2B industries, marketing is largely conducted by sales. Combined, these two areas should work together with mutual respect towards the same goal. In doing so, perhaps the 15% to 40% of the corporate budget spent on sales and marketing might produce the real big thing: Revenue Generation.

The May Report, TECH BUSINESS BRIEFS, June 13, 2002

About the author

Tim J. Smith, PhD is the Managing Principal of Wiglaf Pricing, and an Adjunct Professor at DePaul University of Marketing and Economics. His most recent book is Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures.

Tim J. Smith, PhD
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