Sunday, January 30, 2011

Marketing to consumers buying for business

The books that Packt publishes provide knowledge, technical support, fresh ideas and case studies to IT professionals. These books are bought largely to aid work projects and as such, we sell most of our books during the working week, Monday to Friday. So it was to my surprise to find our new premium subscription product selling more during the weekend than during the week.

This was a puzzler.

I began thinking about and doing some research into the differences between weekday customers and those that buy at the weekend.

Surveys suggested that the majority of weekday customers claim back from or buy through business accounts. This makes sense because our books support business projects and therefore customers claim the money back as expenses. Unfortunately for me, there was very little change in the ratio of business buyers for weekend purchases.

As I packed up my thoughts and prepared to go back to the drawing board, I began thinking on a parallel track about our customers. Our lovely customers. They're making purchasing decisions and buying for themselves but the company is footing the bill. Not unusual, but a transaction not widely discussed or documented.

So I'm going to return to the drawing board another time and park the question about weekday/weekend customers for now. Instead I want to explore this business expense transaction that our customers use to buy our books.

Business transactions
The terms Business-to-Business (B2B) and Business-to-Consumer (B2C) describe the two main methods of transacting goods and services. These are well established and have been adapted over time to include transactions between businesses and governments (B2G) and, thanks to eBay and the like, even consumer to consumer (C2C).

After looking at the behaviour of our customers in more detail, I believe that there is another, almost tacit style of business that goes beyond existing B2B and B2C strategies. As suggested above, this is business-to-business transactions, purchased by consumers.

Think about how many products and services that are purchased within organizations for organizations are actually done so by regular employees, or consumers, rather than professional buyers, purchasers or business managers.

The types of products and services in these transactions are generally medium to low range in terms of price and are often paid for by the employee and then claimed on expenses. This can include anything from books, tickets and travel to room bookings or stationary. Essentially, these are products and services that are considered by the moneymen to be low risk enough to empower employees with making their own purchasing decisions.

In order to fit in with the establishment we could call these types of transactions, B2C4B.

The classic business-to-business marketing tactic is to push products to their target market by working with the businesses that sell them to consumers. More often than not, this involves steep discounting with the development of close relationships between individuals in the supply chain key to success.

Using supermarkets as an example, businesses that manufacture the products that line the shelves will typically discount by 50% on its retail price. Whereas it’s the supermarket’s responsibility to promote these products to its customers, it’s often the manufacturer that pays for this promotion. Buy-one-get-one-free and similar offers are largely absorbed by the manufacturer and it’s often their representative’s relationship with the supermarket’s purchaser that gets them to the front of the shelf.

Business-to-consumer, or selling and marketing goods to the end customer, adopts well known tactics. We're all consumers and the majority of us will have been sucked in by slick advertising, the powerful benefits or celebrities endorsing that must-have product. These appeal to our desires and aspirations.

So why should we target consumers buying for businesses differently?

Whereas B2C tactics can be applied in these scenarios, and will have an impact, consumers buying for business have different behaviours and will purchase with a different mindset. Whereas consumers buying for business are desire driven and influenced by third parties, they will be hesitant due to intangible pressure from management. Depending on the size of the business and also their role within it, these consumers may be less price sensitive as ultimately, the money isn’t coming from their pocket.

There is also the possibility that many business-to-business strategies target professional buyers and purchasers when in reality they could also be targeting consumers.

There are some good examples of businesses adopting this B2C4B approach with their marketing campaigns. Viking Direct is an office supplies company selling everything from paper and pens through to computers and coffee makers. The company sells online but built up its business through a hugely successful mail order catalogue.

Viking understands that as well as business owners and senior managers, amongst its target market are going to be PAs, receptionists, administrators, and executives etc. buying on behalf of their company. The marketing team at Viking has tacitly adopted this B2C4B strategy by targeting these buyers. Along with purchases of particular items comes free gifts.

On the homepage of the site today are offers of a free torch toolkit with on orders over £100 and a free camera with selected Lexmark printers. Let's face it, offering a 10% discount on a printer might not be a deal breaker for people who, ultimately, aren't footing the bill. However a free gift, whether for the company or for the person making the order, is going to turn heads.

Taking this idea further are many agencies who keep in their client's good books by providing them with gifts at Christmas time, or by taking them out to lunch on their expense account. A really good agency will find out important dates or events in their client's personal lives, like birthdays or weddings. They then send cards and phone up and pass on their congratulations. These tactics are adopted by agencies because they know that even though they're working business-to-business, the point of contact is a consumer.

Instinctively, Packt has adopted a B2C4B strategy since it published its first book in 2004. The marketing team targets consumers and also works closely with individuals direct at businesses. I think the clearest evidence of this is how is set up.

The books themselves are written to include case studies with practical real-world examples that can be applied to professional projects. Our product pages are set up to demonstrate how consumers will benefit from the books as well as outline how these will be translated into tangible business benefits.

Should the add-to-cart button be clicked, the shopping cart is set up to make expense or business transactions easy. We include a box in the cart for customers to add their VAT number and then enable invoices to be easily downloaded from customer accounts.

So what does this mean for you?

Depending on the products that you work with, this could mean nothing! However you might want to take a look at your current strategy and think whether you are, or need to, target consumers buying for their business. Should you adopt different tactics for them?