In the latest edition of the “Taking the Long View – Conversations with The B2B Institute at LinkedIn” series, B2B Institute’s Global Head Jann Martin Schwarz speaks with Dean Aragon, CEO of Shell Brands International. After a successful career at Unilever, Dean is now bringing some of his skills for “data alchemy” to a quintessential B2B brand.
Jann: Let’s start with a deceptively simple question. Why is B2B different from B2C and in what respects are they similar?
Dean: The differences in B2B (vs. B2C) are obvious to many in terms of the commercial dynamics and the target customer profiles. You’re talking to fewer individuals because the size of the transaction basket is a lot larger. The stakes are definitely higher. In B2C, if you buy the wrong type of shampoo, it’s not the end of the world. But if you had ordered the wrong set of industrial products, whose quality is suspect, then the consequences are more severe for the business.
Another noteworthy point is that B2B customers are not necessarily the end users of what they are buying. It’s therefore critical for B2B marketers to know their customer’s customer.
But the more fascinating thing is where B2B and B2C are very similar. They’re very similar in the sense that you’re still, always, dealing with human beings. Because there are fewer humans involved in your B2B customer sets, a lot of the principles in B2C marketing have the potential to be more powerful.
In B2B, you can actually get closer to those human beings. It’s physically and mathematically possible to do so. FMCG marketeers can only read about a cross section of their intended target users through projective research or privacy-compliant third-party data. Hence, if done well, marketing programs to humanize brands can be so much more personalized and engaging.
Jann: So why aren’t B2B marketers tapping into that human element more?
Dean: There are many stereotypical assumptions made about B2B customers.
When I first landed at Shell, I engaged quite a few of our B2B businesses, and what I heard was quite revealing: “We know what our customers want. They look for high quality products, reliable supply, favorable trading terms, discounts, etc”. Some, very expectedly, cited the ‘relationship’ factor. But on further probing, these relationships, however good, were still largely transactional in nature.
My line of inquiry pushed it to the next level: “How much do we know about our B2B customer’s inner motivations, the psychological levers, the unarticulated needs?” Therein lies the acknowledgement of their humanity. For instance, is this business run by a second-generation family business, where the children are trying to prove that they can take the business further than their parents? Is there a procurement director aching for a promotion and is looking for a big breakthrough or gamechanger, to prove to his or her value and merit to senior leaders? Are they looking for a deeper connection with a trusted adviser/partner more than just a perfunctory transaction with a reliable business supplier?
Jann: Turns out B2B executives are human beings too!
Dean: Exactly. The unarticulated needs, both rational and emotional, are often much richer and fuller of potential. In truth, these companies want more than just satisfaction of their business requirements, even when they express the opposite. It’s incumbent upon a B2B marketer or commercial manager to probe deeper and unearth these. Do they have a thought leadership agenda? Are they looking for a trusted partner, an advisor in a game-changing agenda item? Do they want to transcend their industry and be something more in their country, a pivotal player in nation building? What is the bigger dream?
Jann: Do you have some stories to share?
Dean: Let me give you a very vivid example.
This is also a very moving story of humanising the customer. Shell sells lubricants to a lot of independent automotive garage workshops in India, the kind you bring your car to for oil change. The traditional marketing playbook has been all about promotions and detailing, selling to a shop who is your reseller to car owners. That involves enabling mechanics with useful technical information that they can use to explain to car owners why our branded offer is preferable. But of course, most of these mechanics are financially unempowered or marginalized. And because they are such, they’re generally uninsurable.
So, if an engine block falls on your foot, that means your family is not going to eat while you are off work. Understanding the humanity of the situation, what the Shell B2B lubricants marketers in India did was ask themselves: ‘Instead of spending money on the usual promotional schemes, what if we can help them get healthcare insurance? Why don’t we partner with a healthcare insurer, and provide some financial cushion, in case of an emergency?’. Other schemes also involved converting product sales ‘points’ earned into tuition fee subsidies for their children.
You can imagine what happened to our sales performance, by simply serving the customer as humans at the heart of our business. But more than this, imagine how fulfilling and inspiring this is for us who work in brand, business or Marketing.
Jann: That’s very powerful and inspiring.
Dean: It is a powerful human connection – this is just one example of how marketers do what they should be doing, which is to recognize the humanity of the customers and distill real human insights. Of course, it doesn’t supersede the fundamental requirements of high-quality products, reliable supply, and great trading terms. But equally it can’t just be all about what we are selling. Ultimately, this is no longer B2B or B2C, but B2H – Business 2 Humans!
Jann: The functionality and features, that’s the table stakes. That’s not the thing that’s going to make your brand distinctive.
Dean: Absolutely! And genuine human insights enable this. Just as the best marketers would have done in B2C/FMCG marketing. I mean, why does Dove have to create an idea called Campaign for Real Beauty that democratizes beauty? Because it’s not enough to be a good quality soap that you want people to Buy. You must also offer something that your customer will Buy Into.
My assertion is that this critical combination of Buying and Buying Into is urgently needed in B2B.
Jann: To follow up on that, what’s your take on differentiation vs. distinctiveness? Distinctiveness is often the underrated factor, especially in B2B.
Dean: It’s not enough to be different if it’s not manifested in a distinctive manner. But to avoid an over-intellectualization of semantics, let’s just stick to differentiation in the fullest marketing-savvy sense.
Determine and execute what makes your offer or your branded proposition sufficiently and compellingly differentiated. Many will say this is difficult. It’s easier to stay in the comfort zone of how it’s been done all this time, how it’s been passed on to you. But it’s never been meant to be easy. If it were, good or great marketers wouldn’t be necessary!
And I think that degree of difficulty is exactly what marketers should be obsessing about in B2B. That’s how you prevent or defeat commoditization, which can only be value-destructive. We in B2B marketing must never capitulate to commoditization, simply because we don’t want to rock the boat or take on the challenge of unlocking barriers to growth. We need to be wary of the ‘that’s how we’ve always done it’ syndrome.
We in marketing always want our brands/companies/products to be preferred. But here’s the thing. It is intellectually impossible to be preferred, if you are not differentiated!
Jann: Yes, as our research partner Rory Sutherland likes to say, the only legal and sustainable monopoly is an emotional, creative monopoly that a brand can have in the imagination of its customers. Because in the mind of the customer, value is whatever they perceive it to be. And so, if you find a way to tap into value creation through marketing, that’s much more defensible and much more differentiated and distinctive than just price.
Dean: Spot on, Jann. Marketing plays a crucial role in creating and nurturing that ‘sense of value’ in the mind and heart of the customer.
Speaking of value, I find that amongst the 6Ps (or however many Ps) of Marketing, many marketers tend to struggle with Pricing.
Jann: It’s true. We don’t talk enough about pricing as a marketing strategy.
Dean: When it comes to pricing, it feels like the only game in town is to head south. I think this is a mistaken notion of ‘value’. I was trained as a beauty [category] marketer. I learned something in beauty marketing, which is, you need to be reassuringly expensive to be credible. Because if it’s too cheap, then it’s too cheap to be of good quality or it’s too cheap to deliver its promises! Of course, one must also never go beyond what’s justifiable or affordable.
The real strength of a brand, amongst many factors, is its ability to command a premium. So, the challenge is defining, articulating and sustaining the basis of that premium.
Jann: Clearly, the fact that pricing is not taken seriously enough also has to do with the fact that, often, marketing doesn’t own pricing. It’s the CFO, it’s strategy and operations people who actually set the prices of products. And so, how do you convince your executive leadership to give marketing the kind of strategic perch that it deserves?
Dean: I think there may be structural issues in some sectors or companies, but that could also be an excuse. You don’t need an executive mandate to do the right thing for customers and the business.
Again, there are things that I’ve learned in B2C marketing that apply here, which is to look at category portfolios rather than individual brands or products. When you look at it through the lens of a portfolio, then you can understand how you play with segments, value propositions and price tiers. If you overlay that against an astute customer segmentation model, based on deep understanding of their needs, you can understand how to maximise value creation. It’s often when you are dragged into the siloed nature of specific product lines that you don’t have a lot of room. Clever segmentation allows you to play a smarter, bigger game of matching the right offer with the right customer needs. That leads to a win for your brand/business and, more importantly, a win for the customer, whose success you have enabled.
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