Can differentiated values transform B2B sales growth?
The more differentiated your value proposition, the more distance you put between yourselves and your competitors. Whilst pricing remains a critical aspect of differentiation in B2B sales, longer term revenue growth relies on understanding both the rational and emotional factors behind your buyers’ purchasing decisions.
It’s important to be able to be able to tap into both to secure B2B sales growth, yet many B2B companies undervalue the importance of being able to resonate quickly and effectively with their buyers.
Can you avoid getting beaten up on price?
The B2B tech industry has changed, the qualities that make value propositions differentiated have evolved. Factors such as improving productivity, like helping save time or reduce effort, or enhancing organisational process, like being able to simplify or automate processes, are now considered as hygiene factors. For B2B buyers they’ve largely become transactional value propositions.
Although transactional value propositions are rarely unique enough to differentiate your product or service, companies continue to use them in their positioning. In doing this they risk marketing themselves into a commoditised space, where the sales teams find themselves competing on price and leadership despairs as sales conversion success declines and margins erode.
B2B value differentiation – it’s personal
It’s time for companies to truly understand the importance of positioning and start differentiating themselves on values that are more subjective and emotional. Whilst we associate subjective, and sometime quite personal, values to B2C markets, a study conducted by Google, Gartner and Motista debunks this totally. They’ve found that B2B customers are, on average, significantly more emotionally connected to their vendors and service providers than B2C customers. It seems the traditional differences between B2B and B2C buyer behaviour are less cut-and-dried after all.
Defining your differentiated values – where to start?
In 2018, Bain & Company published a Maslow-type hierarchy of elements of value in B2B identifying 40 kinds of value across 5 categories. This is a useful model to help expand our thinking around values and highlight the power that more subjective and personal values can have in helping us differentiate our offerings in B2B. I’ve just summarised some of these below but you can read about Bain & Co’s work in this HBR article.
At the base of the Bain & Co pyramid sits the transactional values I referred to earlier. As you go up the pyramid the values become more subjective to the Buyer - and more intangible for the company. With, at the apex, values linked in purpose, such as environmental or social causes.
It is important to note that subjective values do not need to be over complicated, or require significant business investment. As the Bain & Co research makes clear: ‘You can often invest in elements that matter to your customers without overhauling the products or services themselves’.
Differentiators that may work for you:
Easy to do business with - Everyone says this, right? Wrong. According to Gartner, ‘77% of B2B buyers state that their latest purchase was very complex or difficult’. In their research Gartner found that ‘customers who perceived the information they received from suppliers to be helpful in advancing across their buying jobs were 2.8 times more likely to experience a high degree of purchase ease, and three times more likely to buy a bigger deal with less regret.’ If you’re a business who’s worked hard to remove friction from your sales and customer service operations, then this could be a perfect differentiator to help you stand out from your competition and smash those sales targets!
Customer experience - B2B buyers are catching on… it’s all about them!! Being able to manage the overall impression a customer has of your business is a potent differentiator - and can be a massive boon to your bottom line. According to SmartKarrot, enhancements in customer service can reduce customer attrition by 10-15% an and raise offer win rates by 20-40%. In research by Emplifi, 86% of their survey respondents claimed they would leave a brand after as few as two poor experiences. Consider how your customer support and service can outshine competitors. It's not just about solving issues; it's about building lasting relationships with clients by making their experience seamless and delightful.
Reputation - Trust and recognition in B2B sales can be differentiators in themselves. And, as we seen in the previous point, strong brand image and reputation often depend on a top-drawer customer experience. Businesses that have cultivated a positive reputation for reliability, quality, and ethical practices often find it easier to attract and retain clients. Consistency in branding and messaging also helps to reinforce your differentiation strategy.
Sustainability - is no longer just an ethical consideration; it's a strategic differentiator in a world where corporate responsibility matters. If your business can demonstrate a commitment to environmental or social causes, you have a very compelling differentiator. Highlighting eco-friendly practices, ethical sourcing, or community engagement initiatives can attract clients who align with these values.
Conclusion
A differentiated value proposition will help you stand out from your competitors, helping future-proof your pricing strategy as well as protecting margins, recurring revenue, and boosting sales success. As Roger Dooley says in his Forbes article: “Customers expect more than just a product or service - they want a seamless, convenient, and even enjoyable interaction with the brand”.
Leveraging the power of customer experience - being responsive, knowledgeable, and willing to go the extra mile - can set your business apart, especially in industries where support is lacking. As B2B buyers increasingly base purchasing decisions on emotion, trust and recognition are becoming value differentiators, meaning brand image and reputation need to be at the heart of your value proposition.
If you have big growth ambitions for 2024 – and even bigger sales targets – the business case to review and update your value proposition is strong. Get in touch!
Sources
Bain & Co’s B2B Elements of Value Infographic
HBR article - The B2B Elements of Value
Gartner - New B2B Buying Journey & its Implication for Sales
ThinkwithGoogle - From promotion to emotion: Connecting B2B customers to brands
Forbes - How To Make Smart Customer Experience Changes
Emplifi research - link
Smartkarrot insight - link
