All companies need to make money. Every business is built to make a profit.
Does that mean that a business grow merely by wanting to grow or by simply being aggressive? Successful companies focus on one thing over the rest – creating value for their customers.
What do customers value?
Value is the reason people choose a product or a service. Customers buy things or hire services that create the most value over competing offerings.
Yet, value means different things for different people.
Value can be realized with better quality, lower price, superior experience, higher reliability, better endurance, or even friendly service.
For example, some people continue to visit neighborhood shops instead of retail stores even though the latter often have lower prices. These customers get value from the personal service at the neighborhood establishments. They value the interaction over lower prices.
However, a single brand cannot create value for every type of customer at the same time. Delivering value in one area inevitably leads to a trade-off in others.
A high-street fashion brand that offers exclusivity and unique designs cannot provide value to price-sensitive shoppers. If they do, their exclusivity and uniqueness are compromised, and their original customers lose interest.
This is the reason consumer retail companies like Procter & Gamble and Unilever offer a portfolio of brands for same product categories. In fact, P&G markets over 12 brands of just laundry detergent around the world!
These brands create different types of value for groups of people that have varying degree of needs and expectations from the same type of product.
Understanding value for B2B products
When I work with enterprise companies, we first identify what their buyers value. Does the company understand its users? Does it know what they value and what they don’t care for?
Founders of B2B startups may understand value in a consumer market but are not able to relate it to enterprise technology industry. This is a common mistake. They believe B2B is all about aggressive selling but they fail to understand why people buy products at all.
Inexperienced leaders seek to generate revenue with aggressive sales tactics, sending unsolicited email filled with their product features, and with poorly targeted ads that don’t address anyone’s needs.
These approaches generate fragmented, short-term results at best. This frustrates sales and marketing teams and they resort to even more desperate tactics.
It’s a downward spiral that eventually leads to startup failure.
As reported by CB Insights, it is the single biggest reason startups fail. No market need, getting out-competed, and no business model are outcomes of not understanding what customers value.
From the aggregated survey, CB Insights noted:
“Tackling problems that are interesting to solve rather than those that serve a market need was cited as the No. 1 reason for failure, noted in 42% of cases.”
From the above survey, a co-founder of one of the failed startups – VoterTide, said:
“We didn’t spend enough time talking with customers and were rolling out features that I thought were great. We didn’t realize it until it was too late. It’s easy to get tricked into thinking your thing is cool. You have to pay attention to your customers and adapt to their needs.”Founder of VoterTide
And another co-founder of Patient Communicator commented:
“I realized, essentially, that we had no customers because no one was really interested in the model. Doctors want more patients, not an efficient office.”Founder of Patient Communicator
What do buyers value in B2B products?
In B2B, just like in consumer markets, different buyers desire different type of value.
Yet, there are traits common across B2B industries and product categories:
- B2B buyers are risk averse. They value products (and companies) with lower risk of failure over others.
- B2B buyers need to build and protect their credibility. They value products which enhance (and at least not negatively impact) their reputation in the company / industry.
- B2B buyers appreciate clarity and objectivity. All vendors say positive things about their own products, but B2B buyer value objective facts over self-proclaim.
- B2B buyers value higher standards of ongoing support, training and after-sales service.
- B2B buyers value a longer-term relationship with a trusted partner, not just a purchase transaction.
A clear value-driven message, case studies and thought-provoking content accelerates B2B sales. Together, they demonstrate to prospects that the vendor has successfully powered use-cases in other companies and is an expert in its field. This assures prospects of lower risk thus creating an impression of value in their mind.
Of course, different group of buyers – companies, roles, markets, etc – will always value different benefits. You must strive to understand which buyers value what traits and use that knowledge to drive your marketing and sales.
You must strive to understand which buyers value what traits and use that knowledge to drive your marketing and sales.Vaibhav Bansal
Does your company focus on generating revenue or creating value for buyers? Is it possible to achieve sustainable growth without knowing what your customers truly value?
Don’t chase growth without understanding what causes it
When you ‘chase revenue growth’ without understanding what your customers value, you are trying to achieve a result without knowing what causes it.
Revenue is not self-driving. It is the result of customers buying a product over others for the value they perceive or experience. And when more people see value in a product adoption increases. This wider adoption drives a company’s growth.
Real source of growth is customer value. Everything else in marketing and sales is supposed to communicate that value to its intended audience.
Aggressive sales, higher-quality data and more promotional campaigns help accelerate adoption in the market, but without communicating clear value to buyers, they bring limited and short-lived results.
Communicate value of B2B products to your customers
At this point business leaders often ask me, “how can our prospects experience value without trying our product?” or “I don’t understand how we can show value without demonstrating our product?”
When new businesses build their marketing programs they talk about product features, their company story and what they do.
Instead businesses must help users realize potential value using clear messaging, design, and helpful content. Use language your buyers can relate to. Talk about solving problems they face everyday. Show social proof of success that their competitors or peers have achieved.
Once your customers perceive value, they will show interest. And an aggressive sales team, higher-quality data and better coverage on marketing channels accelerates this process.
In the next article, I’ll take a few examples to showcase how you can help buyers realize potential value by refining your user-facing communication.
How does your company drive growth? Are you pushing sales without understanding what your buyers truly value? Are the results always underwhelming?