Value is an interesting and important term to define in the B2B world. While B2C customers will generally look at value as economic or emotional factors, the term in B2B usage is much broader. Your value can be defined through economic, performance, operational, strategic, productivity – the list goes on!
With the various B2B elements of value, there is a broad spectrum to ensure that are being met, and this also applies to your B2B loyalty or incentive program. More than just reward value, you need to ensure that your program meets the customer’s basic needs and moves up Maslow’s hierarchy to ensure that personal concerns are met, and functional value is provided.
This blog will take you through the B2B elements of value, value propositions and the ways that you can create value in a B2B world. If you’re considering a B2B loyalty or incentive program, leave the strategy to us – we’ve been creating value in our reward programs Australia and New Zealand-wide since 1996, so trust us when we say we know what we’re doing!
Unlike the emotional factors present in a B2C purchase process, the B2B elements of value are a more complex full range that needs to be addressed. The Harvard Business Review’s article “The B2B Elements of Value” addresses this in its opening example, which is important to understand.
They posit that a chief operating officer who is looking to purchase a convertible sports car would make similar price value calculations on a fun personal purchase to the ones made when negotiating at work from an operational perspective.
While there are similarities in the way that they may approach the purchase (price, warranties, service levels, reflection of values), the differences are increasingly important to nail, and finding ways to utilise your elements of value to stand out against competition is integral to your organisation’s success.
Similarly, customer loyalty is earned through the elements of value. Corporate decision can be made beyond just price. This could be addressed by procurement teams but they can come in after an enquirer as done ther initial analysis.
That is where the B2B elements of value can be addressed in a pyramid not unlike Abraham Maslow’s, with objective value at the base and subjective value as the pyramid ascends. These are laid out to address the motivations for B2B purchases:
At the base, we find table stakes – the multiple elements required to even be considered by procurement teams or economic buyers when evaluating products that can solve their pain points. These can be considered the core elements of customer priorities and are more complex to address than a simple cost reduction.
Prospective customers need to know that your product meets the requirements of regulatory compliance and follows ethical practices, as well as an acceptable price prior to presenting your product to the middle and upper levels required to decide on general business-to-business purchases. Social responsibility is a must! These can be considered included objective criteria in any marketing strategy moving forwards.
Once you are confident that the table stakes have been addressed, we start finding ourselves in less certain territory – while this will generally apply to most organisations, the weighting of these may vary in the decision processes of prospective customers.
The next most likely decision factors come in the form of functional elements, such as economics and performance.
If your product or service can serve to improve the business’s top line or reduce current costs, or improve company performance through product quality, improved scalability, or offering benefits in the form of innovation, these additional value elements will see your product move onto the next stage of evaluation.
The middle levels are of a more subjective value but are still important transactional aspects and should be considered high-value elements. These are laid out below:
Does your product or service improve operations within the organisation? Does it simplify existing processes, and improve integration and connection between departments? Specifically, what is the functional value?
Do they offer a strategic benefit? Does it reduce ongoing current risks, improve your organisation’s reach or flexibility, or does it improve existing component quality?
Will it enhance relationships with your organisation or improve the buyer’s reputation? Will it positively augment cultural fit, improve responsiveness such as in the company’s customer strategy, provide a boost to your expertise, or stability in doing business with their company?
Does your product or service offer an improvement in accessibility? Will business customers become more available, reach a variety of customers, or see a rise in configurability?
The next stage should be considered more emotional elements, and represent more of the individual value, rather than a representation of the firm’s ability to do business. These are subjective values rooted in the individual reviewing, rather than as a collective.
These personal elements, such as how they affect the individual or can improve their career progression, can be somewhat more difficult to address in marketing practice. However, these can fall under the idea of demonstrating a clear understanding of the pain points that your customers can expect to be facing, as well as unforeseen ones that may occur.
Positioning your brand as a thought leader and packing educational pieces into the early stages of the purchase process can address these personal concerns. This is where B2B loyalty programs can personal a business transaction, overtime understanding the person within a business.
The top of the pyramid of elements are far less quantifiable criteria and rest solely in the hands of the consumer markets. These are considered inspirational elements and feed into the vision and hope for the future or enhance the buyer’s reputation in terms of social responsibility.
These may seem intangible, but a strong understanding and delivery of the B2B elements of value will likely have already addressed these prior to reaching the pinnacle.
While it may seem like a great deal of work to address all of these in your B2B marketing strategies, all these steps can be met with a deep understanding of your customer.
Developing buyer personas when understanding your B2B customer journey and working on your B2B marketing funnel will provide your organisation with a greater grasp on the potential customers you’ll encounter in traditional B2B business within your industry.
A great way to deliver additional value to your customers is by considering what a B2B loyalty program can do.
Delivery of a successful program can elevate your brand above competitors by providing a clear demonstration of supplemental value beyond the product itself, as well as building a sense of community and a strong foundation in your customer base serves to illustrate confidence in the product or service itself, as well as enhance B2B retention strategies.
If you’re considering the ways to boost the value provided by your brand, get in touch with us today!
What is a B2B value proposition?
Once you have built an understanding of your customer base’s wants, needs and expectations from your products, it’s important to find a way to deliver what your product or service can do for them in a succinct and compelling B2B value proposition.
Value propositions are statements that convey the unique benefits that a customer will experience using your product or service. It should follow your company’s brand positioning and align with your full range of product or service messaging.
The importance of a captivating value proposition is that this statement should capture the attention of your business-to-business customers to initially gain table stakes. For example, our B2B value proposition is below:
B2B success is achieved with strategy first. Create measurable changes in behaviours that improve your business performance by partnering with B2B experts.
212F Value Proposition
This statement shows our brand messaging (“strategy first”), demonstrates value (“create measurable changes in behaviours that improve your business performance”) and shows how we can assist (“partnering”).
Your value proposition should identify your business and position but shouldn’t be confused with your mission statement. Your value proposition should outline what you offer customers and why they should choose your brand over others, while your mission statement is for your objective as an organisation. There may be similarities, but your value proposition is product- or service-oriented, rather than your statement being goal-oriented.
This proposition is where you should outline the B2B elements of value that your brand’s offering is able to deliver to your business customers. It is increasingly important to ensure that your value proposition captures these, as otherwise, your business may notice its competitive position being eroded and therefore lose its pricing position, which can be also known as a commodity trap.
To ensure that your product or service avoids falling into a commodity trap, present your niches and strengths that are offered within your B2B elements of value which will allow you to stand strong against your competitors, and continue to succeed!
How do you create value in B2B?
Now that you know what to bring to the table to encourage business purchases, as well as the needs and personal concerns that business customers bring, you need to establish exactly what your business’s value approach will be.
Will you proceed by presenting your less transactional aspects to appeal to the higher elements of value, or lean into your more objective value to ensure that you’re receiving table stakes at more discussions?
Here are some examples of how to ensure your brand is creating B2B value:
Monitor your B2B value element strengths with regular surveys and net promotor score sends. You can even have specific element influenced NPS sends when trying to work out what quantifiable criteria and elements stand out from the rest in determining how to adapt your customer strategy. For example, if you receive common responses from customers in corporate roles that you provide a strong technical support process and you’ve heard your competition’s technical support process terrible, put this first and foremost in your value proposition!
Clearly define your buyer personas to effectively market your product or services. By having a solid grasp of your audience, you can save time and effort advertising your product to incorrect niches or potentially mis-marketing your efforts. For example, if you are infrastructure suppliers and your business products are directed to improve a B2B firm’s advanced analytics practice, you should be directing your marketing efforts to demonstrate how your product is able to assist with operational performance by highlighting qualitative customer studies and consumer insights. Highlight the niches that your buyers want to see and market to your customer’s point of view!
Review your competitors’ efforts to keep up to date with the latest market trends, and ensure you are constantly finding ways to optimise prices. If your competitors are undercutting your price while providing a similar product, you’re going to lose business – people don’t want to make multimillion dollar deals if they don’t have to!
Alternatively, if you’re commanding a greater share of wallet than your competitors, you can feel more confident in network expansion. If your product or services perform relative roles in the market, and your price and performance shape are comparable, it may be time to consider expanding your efforts.
Finally, an additional way to create B2B value in your offering is to consider the impact that providing a B2B loyalty or incentive program can bring.
Beyond simply utilising the loyalty program benefits as a deal sweetener, it provides insights into your customer base through data on uptake, additional customer engagement and retention benefits, and much, much more.
If you’re interested in finding out what a B2B loyalty program can do for you, reach out today!
Harvard Business Review created a valuable tool in their pyramid of B2B value elements, and it should be considered in any B2B marketing efforts moving forward.
Generally, the best way to start is to consider how you have included objective criteria, as this will likely appeal to more of your audience. These are located at the base of the pyramid and build the foundation for any marketing efforts. After this, it’s important to determine where the subjective criteria figured into your strategies, which are the elements located higher up the pyramid.
Inclusion of the full range of elements you know your product can address is valuable, but specific knowledge of your customer can reduce anxiety play when constructing your B2B marketing efforts.
We have a lot of business-to-business customers bring questions like this to us. While the quantifiable criteria in your organisation will remain as it is, a good B2B loyalty or incentive program can shine a light on economic elements, highlight improvements within relationship and operational elements, as well as using the additional customer touchpoints that come with your program to elevate your more subjective elements like purpose.