Which quality best supports and encourages B2B buying decisions? In the 21st century, that quality is relevance. According to a recent survey by Kantar Retail Consulting, whose North American division is based in Boston, MA, 71% of B2B and B2C customers feel that loyalty-incentive marketing promotional programs do not cause them to feel more loyal toward a company. It has become evident that regardless of your industry, customers are doing business with you based on the perceived relevance of your products and services to their needs and priorities. Attempting to buy loyalty with discounts, rebates, rewards, or swag bags is not as effective as it used to be.
A 2017 study by the global consulting firm Accenture found that U.S. businesses lose $1 Trillion a year in annual revenue to competitors because their (former) customers no longer consider them to be relevant. The study results appear to indicate that to succeed, businesses must be perceived as fulfilling customers’ immediate needs as they occur. Personalization is helpful, but it is best applied in support of relevance. The authors recommend that companies structure the customer experience to deliver as does a butler or concierge.
So how do business leaders navigate the paradigm shift? Joshua Bellin, Robert Wollan and John Zeally of Accenture recommend that organization leaders move on from the former gold standard of marketing, the 4 Ps—Product, Place, Price, Promotion. No disrespect to the 4 Ps, they served companies well for decades, but customer behavior and expectations have changed over the past 10 years or so. The 4 Ps are unfortunately rather narrow and product-focused for our times. Today, it’s about delivering customized solutions, especially for B2B customers.
Furthermore, a close reading of purchasing data indicates that the usual product-focused market segment labels, e.g., discount, luxury, or environmentally conscious consumers can no longer consistently predict purchasing choices. The needs of all consumers, regardless of socioeconomic status and sociopolitical ideology, vary according to their immediate priorities and context. In response, Zeally et al. suggest that companies expand their marketing guideposts to include these updated 5 Ps:
Purpose: Customers feel that the company shares and advances their values.
Partnership: Customers feel the company relates to them and works well with them.
Pride: Customers feel good about using the company’s products and services.
Protection: Doing business with the company makes customers feel confident.
Personalized: Customers feel that their experiences with the company are always tailored to their goals, priorities and needs.
The “what have you done for me lately?” mindset has replaced loyalty, to a large degree. Perhaps it’s a sign of the entitled and narcissistic culture in which we in the U.S. live. Customer preferences are in constant flux. Short-term strategies and goals are often the norm.
Some companies are able to thrive in this environment, perhaps most notably the global retailer Zara, founded in Galicia, Spain. “Fast Fashion” is the guiding force. In the 1980s, the company invested heavily in design, manufacturing and distribution systems capable of reacting to market trends very quickly. As a result, Zara is on top of nearly every trend in women’s, children’s and men’s fashion and customers eat it up. As of March 2018, there are 2,251 Zara boutiques in 96 countries.
Smaller companies and Freelancers cannot come close to being able to match the power of Zara, but it is possible to leverage relationships and personalization to encourage your current and prospective customers to share what is important to them and discuss how you can meet their needs today and in the future. You probably already know that all too many of your customers will move on and do business with another company that seems to offer a better mousetrap without even discussing their needs with you first. It is discouraging, I know.
The best defense is to be found in the 5 Ps. Start with Personalization and move to Purpose, so that you can make it known that your company can advance the customer’s goals. Segue next to Protection and use the trust that you develop to encourage prospects to feel confident about doing business with you.
Thanks for reading,
Photograph: Lurch (Ted Cassidy), the Addams family butler, in an episode of The Addams Family (1964 – 1966, ABC-TV)