Santa clara b2 b buyer behavior v2


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October 20, 2010 Santa Clara University Leavey School of Business speaker slides for the Mktg 551 MBA course, presented for discussion with Professor Ravi Shanmugam's class.

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Santa clara b2 b buyer behavior v2

  1. 1. MKTG 551: Marketing Analysis and Decision Making Class 10: B2B Buyer Behavior Laura Ramos Vice President, Industry Marketing Xerox Global Services, NA October 20, 2010 Professor Ravi Shanmugam
  2. 2. Laura Ramos Vice President, Industry Marketing • Xerox Corporation, Services Group • Forrester Research VP, 9 years • Stanford BSME, Santa Clara LSB MBA Background • 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: • Follow me on Twitter: @lauraramos
  3. 3. 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‖-graphics Final thoughts and questions
  4. 4. B2B Marketing definition ► Marketing activity performed at firms that sell high-involvement products to other businesses through a direct sales force.
  5. 5. B2B marketing circa 1990: what we did Events Advertising PR Promotions
  6. 6. What do B2B marketers do today? “Which of the following marketing tactics does your marketing organization use?” Base: 317 B2B marketing professionals Source: Forrester Q1 2009 B2B Marketing Budgets And Tactics Online Survey with MarketingProfs
  7. 7. What do B2B marketers worry about? ―What are your top five B2B marketing challenges?‖ Reaching decision-makers 54% Measuring marketing results 53% Improving lead quality 48% Generating more leads 44% Working within budget constraints 40% Deepening relationships with customers 40% Developing the company‘s brand 37% Increasing product awareness 37% Improving data quality and availability 28% Understanding prospect behavior 27% Retaining customers/developing loyalty 25% Improving partner relationships 21% Improving relationship with sales 20% Allocating the marketing budget 16% Base: 569 B2B marketers (multiple responses accepted) Source: Forrester‘s Q2 2006 Business-To-Business Marketing Effectiveness Survey
  8. 8. What does this mean? The explosion of new marketing tactic choices overwhelms marketers Get caught on the execution treadmill Sales gets in the middle Lose sight of impact marketing has on buyer Marketing seen as a cost center, not a source of business value B2B 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
  9. 9. Marketing must know and manage the buyer‘s journey Source: Forrester Research, January 15, 2009, “How To Avoid B2B Marketing Obsolescence ”
  10. 10. It‘s key to choosing where you play in the market Strategic overview Choosing value Providing value • What can we do? • Define market • Execute in market • What do we do • Segment market • Analyze results now? • Position offerings • Refine • Where’s the • Design mix • Expand opportunity?
  11. 11. First of a 4-step process to set marketing strategy P People Assess customer profile and activities O Objectives Decide what you want to accomplish S Strategy Plan for how relationships with customers will change T Tactics, Tools, Technology Decide which marketing approaches to use
  12. 12. 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‖-graphics Final thoughts and questions
  13. 13. 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.‖
  14. 14. Analytics to Action at Xerox Analytical insight and fact-based marketing enhances sales pipeline and productivity 1. Identify and prioritize target 2. Account intelligence accounts using analytics planning  Segment and profile  Account / existing customers Company  Identify look-a-likes Analytical Engine information  Prioritize non-customer Customer data integration  Develop contact opportunities External data data Qualitative data  Perform data assessment Measurement  Integrate with salesfore automation 5. Qualify opportunities & enable engagement 3. Segment & identify  Lead scoring opportunities within  Time triggers accounts  Corporate relationship  By offerings, needs, 4. Generate demand mapping Telequalification: roles, functions • Market awareness and education ID role, BANT  Competitive contracts  Cultivate contacts within accounts  By industry  Retain and grow  Competitive switching
  15. 15. 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 segment Used 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
  16. 16. Analyze customer purchase history, interviews, sales meetings, etc. to uncover clusters of key attributes Source: InContext Enterprises
  17. 17. It doesn‘t have to be that complex! Source: InContext Enterprises
  18. 18. Identify similarities to reduce persona complexity
  19. 19. Create personas based on attributes relevant to purchase decision-making
  20. 20. “I have to focus on the big picture – I need a partner that understands my Carl supply chain.” the Coordinator Seeks to stay on top of operations performance Prefers direct communication Needs customized solutions Personal Profile Personal Information As Logistics Director, Carl ensures that things run smoothly and supplies are distributed to construction sites. Carl Profession: Director, Global Civil Engineering Company has clear ideas about how shipping should run and he expects his shipping partner to share that vision. When he Location: Baltimore, Maryland 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 Age: 42 recommendations, but ultimately, the success of each project is a direct reflection of Carl‘s ability to manage all Marital Status: Married aspects of the supply chain. Personality: Assertive, no-nonsense, out-going 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. UPS Shipping Information Shipping Information 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. Years with firm: 9.4 Products / Services used: xx 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 Tools used: xx and set up customizable reporting templates that could be saved and easily altered to meet his needs. He wants Competitors used: xx access to electronic copies of international documents from the online tools rather than requesting them from the Knowledge: High 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 % of day spent on tasks: 24% that is working towards a solution for him. Internet Usage User Goals Business Objectives Internet experience: Intermediate - Expert When Carl visits the site, he wants to… We want Carl to… Primary uses: Email, news, banking Leverage the tools to manage and improve the Utilize the web tools for information rather than relying Favorite sites: MSNBC, AMEX, Google company‘s supply chain on the local office to provide it Hours online per week at work: 25 Access detailed information and specifications Register and log in when he uses the online tools Hours online per week at home: 14 about services and capabilities Use the web tools for routine reporting Receive customized reports about freight Recommend the online tools to his staff operations cost and efficiency performance Become aware of key tools and service Use the tools to collaborate with the local representatives and his staff
  21. 21. The CIO/CxO The Strategic Risk Manager Focus “I want to make strategic investments Business in IT that support the vision for the company and build competitive edge.” Now Future Age: 52 Chief Information Officer Large Enterprise, Inc. Technical My Role My Work Life A large part of my job is just keeping things running reliably and securely, but my main goal is making sure My Goals My Frustrations our technology and applications align to our business priorities. This can include cost reduction, making our • Align IT to business priorities • Negotiating the terms of global workforce more efficient, or rolling technology into services our customers will pay for. • Control costs and maximize implementations investment • Educating my team on the business I‘m a strategic business person who understands IT, but that doesn‘t mean I want to become an expert on • Make IT a strategic asset and issues, when they focus more on the your speeds and feeds. I got to where I am by being a strong generalist and applying my management skills provide a competitive technology from one role to the next. I rely on the people working for me to evaluate vendors. In fact, I may not have edge/advantage to the business • Shrinking budgets in the face of even heard of you if you‘re not IBM, Cisco, Microsoft or Oracle. I will only approve your inclusion in any major • Simplify processes and operations needing to do more RFIs if you‘re reputable and stable. • Keep up with macro-trends in IT • The CEO or CFO doesn‘t always • Make it easier for our customers to understand technology‘s impact on I don’t want to hear about your products. I need to understand how you will help me create do business with us the business competitive edge for my business -- while understanding the risk/cost drivers. • Achieve/maintain regulatory compliance—mitigate security risks 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. Media & Information Touchpoints 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. My Motivations Proof Reassurance • You do the math, I‘ll check the • Wants recommendations from fellow CIOs answer • Consults with analysts on major Europe • Business-case driven implementations • Looks for measurable value for • Prefers high-level introductions with justification potential vendors
  22. 22. 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”-graphics Final thoughts and questions
  23. 23. Buyer behavior example: Understanding social behavior • Publish a blog • Publish your own Web pages Creators • Upload video you created • Upload audio/music you created • Write articles or stories and post them The Social Conversat- • Update status on a social networking site* Technographics® ionalists • Post updates on Twitter* • Post ratings/reviews of products or services ladder Critics • Comment on someone else‘s blog • Contribute to online forums • Contribute to/edit articles in a wiki • Groups include people participating in at least one • Use RSS feeds of the indicated activities at least monthly. Collectors • Vote for Web sites online • *Conversationalists participate in at least one of • Add ―tags‖ to Web pages or photos the indicated activities at least weekly. • Maintain profile on a social networking site • Visit social networking sites Joiners • Read blogs • Listen to podcasts • Watch video from other users Spectators • Read online forums • Read customer ratings/reviews • Read tweets Inactives None of the above Source: Forrester Research, April 28, 2010, “Social Technographics®: Business Technology Buyers”
  24. 24. Technology buyers are socially active 2009 B2B tech 2010 B2B tech 2010 US adults buyers buyers Creators 24% 43% 49% Conversa- tionalists 33% — 37% Critics 37% 58% 65% Collectors 20% 48% 57% Joiners 59% 55% 73% Spectators 70% 91% 95% Inactives 17% 5% 2% North American And European B2B Social Technographics® Online Survey, Q1 2010 Source: Forrester Research, April 28, 2010, “Social Technographics®: North American And European B2B Social Technographics® Online Survey, Q4 2008 Business Technology Buyers” North American Technographics® Groundswell Heroes Online Survey, Q4 2009
  25. 25. Peers influence purchase decision making Which 3 information sources had the greatest impact when deciding your last purchase? Peers and colleagues (word of mouth) 60% Consultants, VARs, or SIs 39% Your vendor salesperson 33% Industry analyst firms 22% Vendor, industry trade, or professional Web sites 21% Industry events, trade shows, or conferences (in person) 21% Technology or business publications, magazines 16% Discussion forums, support sites 12% Web based events, Webinars, Webcasts 8% Search engines, paid search ads 8% E-mail or electronic newsletter 4% Interactive media: podcasts, video, online demos, RIAs 4% Social networking sites (Facebook, LinkedIn) 4% Virtual trade shows or virtual conferences 4% Blogs 3% Base: 1,011 business decision makers at firms with 100 or more employees in the United States and Europe Source: Forrester's North American And European B2B Social Technographics® Online Survey, Q1 2010
  26. 26. Align buyer behavior to business objectives Social Objectives Functional Alignment Success metrics •Customer insight LISTENING Research •Improved segmentation •Reduced pain; alignment of offering with need •Changes in reach, impressions, brand awareness TALKING Marketing, education •Increased share of voice •Higher quality of responses to offers •Increased velocity of messages in market ENERGIZING Sales •Increased recommendation, promotion, advocacy •Higher trust, brand trust perception •Faster deployments at new customers SPREADING Professional services •Existing customers create new business capacity •Reduced support costs Customer service, •Higher customer satisfaction SUPPORTING technical support •Less churn Development, product •Deliver products faster to market EMBRACING •Increased loyalty, increased advocacy marketing Source: Forrester Research, October 21, 2008, “Making Social Media Work In B2B Marketing”
  27. 27. 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
  28. 28. Final thoughts Know your customers, and how they buy, to make smart marketing strategy and execution decisions What business buyers ―do‖ is as important as ―who‖ they are
  29. 29. Questions? and Thank you Laura Ramos Twitter handle: @lauraramos Post-Class Assignment: Visit my blog and 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: