For all the benefits of the information technology and communications revolution, there is a dark side: information overload and its close cousin, attention fragmentation.
These scourges hit CEOs and their colleagues in the C-suite particularly hard. I am reminded of this syndrome anecdotally every week through my interactions with executives and industry professionals. However, three numbers caught my attention in 2014 that helped to put some hard statistics around the situation.
14 – The percentage of customers who perceive a real difference in a B2B company offerings and value – enough to be willing to pay for it (CEB Survey 2014)
50 - The percentage of B2B marketing spend that goes to areas that do little to influence the purchasing decisions (McKinsey 2014)
93 – The percentage of CMOs pressured to deliver ROI with existing budgets faced with internal silos, resistance to change, and limited expertise with emerging technologies and solutions (Leapfrog Institute 2014)
These three figures point out two separate yet interrelated business challenges faced by many B2B companies today.
The imperative for brand differentiation: With only 14% of customers perceiving a real difference in B2B offerings and value, it is clear that companies must put sharper focus on brand differentiation. No doubt, pervasive competition and low barriers to entry (augmented and accelerated by technology innovations and outsourcing) are making it difficult for companies to maintain distinctive offerings and competitive advantage. But there are other causes that can be addressed.
Part of the problem can be attributed to what I call the “birds of a feather” syndrome. The symptoms are immediately recognizable: uniformity of messaging, uniformity of visuals and carbon copy customer engagement models that leverage similar call-to-actions and tactical means.
For example, how can a prospective buyer (a company representative) conducting online search discern any meaningful difference between the plethora of telecom service providers, when most of their websites relate the same benefits (reliability, unparalleled service, largest integrated network), using the same images (guy in a suite pointing his ET-like finger to a fake electronic board), highlighting almost the same features (99.995% reliability)?
Sorry telecom professionals for picking on you. The wounds incurred battling in the trenches of the telecom industry for 11 years left their scars. Joking aside (I love the telecom space), the truth is that all B2B industry sectors suffer from the same condition.
The causes for this brand uniformity can be explained by the fact that B2B brands are typically centered on product values – the functional benefits delivered by the business and its products and services. While important, all brands can claim the same benefits and basically the identical business outcomes – no matter how impressive they are to you.
Inevitably, attempts to differentiate through degrees of technical performances and metrics serves only to commoditize the whole industry.
It’s clear, it’s time for B2B companies to seriously reassess their value propositions. A good starting point would be to stop focusing exclusively on products and technologies and explore the immense and yet unleveraged power of emotional and personal values, which, according to a CEB 2014 study, provides 42.6% impact on purchase decisions compared to a 21.4% for product value.
Which brings us to the second point:
Customer experience innovation: Let’s face it, we live in the era of the empowered buyer. The old sales funnel approach, which assumed a linear purchasing path is, in my view, obsolete.
Mobility, social platforms and shifting approaches to purchasing decisions are making that path anything but linear. The always-on, connected B2B buyer does most research online and, according to Demand Gen Report, 41% wait until the last minute to contact sales.
The obsolescence of the sales funnel, coupled with sub-optimal customer experiences, is the real problem (and the heart of the solution). In this new environment the interactions customers have across brand touch points are critical – from websites, presentations, trade shows, and technical papers to customer loyalty programs. Do you know how your customers like to be engaged and communicated with? Apparently, the answer is ‘no’ given the McKinsey data quoted above.
For too long, the focus of innovation has been focused on products, which are soon copied. Product innovation is short lived. It’s time to take a holistic look at the entire customer experience and re-imagine the interactions that comprise the customer journey through the design and development of new tools, new processes, new systems, new messaging.
Think about Uber’s success: it didn’t innovate vehicles or bring a new type of driver to the market; it fundamentally changed the experience of using a taxi - how you order, meet and pay for it (it doesn’t hurt their taxis are usually nicer and better taken care of than the ones we are accustomed to using).
It’s time for B2B companies to invest in customer experience innovation to provide differentiating, meaningful value to customers and fuel business performance with renewed vigor and sustained power.
In the new global economic environment, strategic clarity and courage are the new imperatives. The alternative is not a viable one.