Business-to-Business Marketing – Part One: 5 Reasons Why Selling to Businesses is Easier (and More Profitable)
Many entrepreneurs do not realize that selling to businesses can be easier and more profitable than selling to consumers. What if I was to tell you that I know about a hidden market of consumers who…
- Have plenty of money and are eager to spend it.
- Don’t mind, in fact expect, you to try and sell them something.
- Can be marketed to for virtually nothing.
- Have only a handful (sometimes only one or two) companies vying for their business.
Sound good? Then you’ll be pleased to know that this market is real, it’s size is colossal and I’m going to share with you everything I know on the subject.
A Hidden Market
The average person is primarily exposed to Business-to-Consumer (B2C) marketing. This is businesses selling products and services to individual consumers and families – things like groceries, toasters, vacations, cars…
Basically, everything you see advertised on television and on your favorite Internet sites.
The Business-to-Business (B2B) market, on the other hand, is (apologies if I’m stating the obvious) is businesses selling to businesses things that are typically only of use to a business. Things like vending machines, logistics services, advertising opportunities, accounting services, ecommerce software…
I call the B2B market a ‘hidden’ market because most consumers, unless they own a business or work in a role that involves purchasing, are blissfully unaware of its existence. They’re not exposed to its marketing, they don’t have a need for any of the products and they have no clue just how huge this industry is in terms of opportunities or revenues.
If you’re already involved in the business-to-business (B2B) market, you might be taking it for granted. If, thus far, you’ve only ever tried selling to consumers, what you’re about to learn might just blow your socks off.
You NEED to Consider B2B
If you’re a small business (or solopreneur) or you’re thinking of becoming one, you should seriously consider side-stepping into the B2B market, either as a sideline or as your main venture.
** Note: If you’re working in the Internet Marketing niche selling software, training or info-products to home business owners and solopreneurs, you’re in the B2C market. Most of your customers are funding their business from their day job and their mindset is more consumer-oriented. For the purposes of these articles, B2B means selling products and services to businesses with at least half a dozen employees. **
If you’re already working in B2B, you’re going to learn some great tips for finding even more success. You might think you know everything I’m going to share, especially if you’ve been working this market for a while, but I can virtually guarantee you’re going to find some nuggets here that you are going to ADORE.
For example, remember at the beginning of this article when I said you could advertise to this market for virtually nothing? That isn’t simply a quality inherent to the market; it’s a specific strategy that will give you an unparalleled foot in the door.
If you’re in B2B and you’re struggling for visibility, this will get you noticed – FAST!
It’s also a business model that can be emulated in virtually any business niche. If you’re looking for an idea for a business of your own that requires very little start-up cash, this is definitely one to consider.
The only downside…
You’ll learn in PART THREE of this article series – so you’ll need to be patient. But what you’ll learn in the first two parts is crucial to understand before getting there, so please follow along and resist the temptation to skip ahead.
We’ll begin with five differences between selling to consumers and selling to businesses, and why these distinctions make B2B so appealing.
- Consumers spend their own money…
…Business people spend the company’s money
If I need to buy a new microwave, the first thing I do is put it off. It’s not a fun purchase and I’d rather spend the money on pastries. Eventually, when I can’t wait any longer, I go onto Amazon and buy the cheapest microwave I can find that doesn’t look like it’s going to irradiate my family.
But, if I decide I need a new wireless printer for my business, I go online the same day, whip out the company credit card and buy the best mid-range model I can find.
I own my business so, technically speaking, it’s all MY money. But I have a very different view of money in my business bank account compared to money in my personal bank account.
It’s not just that business purchases reduce my tax bill. It’s that I see my business as being the machine that produces my salary. I want my business to be well-stocked with good quality equipment and be serviced by good quality companies because I want it to thrive.
Likely, it also has to do with the fact that I don’t FEEL the money coming out of the business. It’s more abstract and, in some way, spending it feels less consequential.
Whereas that $100 I dropped on a microwave… that could have purchased a lot of donuts.
So that’s difference number one. When you sell to a business owner or an employee with purchasing power, they’re not spending their OWN money. The resistance to the sale, generally speaking, is lower. Much lower.
I’ll never forget the first time I hit the phones to try and sell advertising to businesses in my chosen niche. I called every contact in my book and, within an hour, I’d sold an advertising package worth around $750. My second sale that day came after a five-minute conversation with a business owner who immediately saw the value in what I was offering and agreed to spend $2,000.
Within a couple of weeks, I’d sold around $20,000 worth of advertising – simply by making phone calls and sending emails.
(More on this story in PART TWO…)
- Consumers choose whether to spend money…
…Business people have to spend their budget.
Imagine that you’re the head of the marketing department and you have a budget of $25k for the next 12 months. At the end of the year, you need to show what you’ve spent, where you spend it and what you achieved as a result.
Do you think your boss is going to be impressed if you achieved modest results but only spent $5k?
No! They’re going to be asking why you didn’t spend your full budget and achieve amazing results.
Employees who make purchases on behalf of their employer want to spend their money wisely, but they NEED to spend it. Unlike selling to a consumer where spending is discretionary, when selling to a business you often talk to people who are actively looking to invest in something.
- Consumers want problems solved or to have fun…
…Business people want to keep their job (and succeed)
This is an extension of the above. If, as an employee, you have a budget, you want to spend it – if only to ensure that you don’t give your boss reason to reduce your budget the following year.
But, more importantly, from our perspective, this is VERY different mindset.
When you’re selling to a business and you’re speaking to an employee who has the ability to make spending decisions, their motivation for purchasing from you is related to their job security and their chances of career advancement.
That is a POWERFUL motivation that goes way beyond most consumer purchasing decisions.
For most people, their job is tied up with their self-esteem, their ability to maintain their lifestyle and their capacity to provide for their family. If your product or service helps them in this capacity, you’re offering, not just a benefit to the business they work for, but something that speaks to their PERSONAL needs.
- Consumers don’t understand marketing…
…Business people think they understand marketing
Most consumers don’t know about the psychology of selling and influence, making them more susceptible to its effects. Business people, on the other hand, even if it’s not their specialty, usually have at least a basic understanding of sales and marketing.
You’d think this would be a mark against selling to businesses but it really isn’t.
Oftentimes business people think they understand marketing, even if they don’t. Which means, when you employ even classic Internet marketing techniques, they’re overconfident and are even more likely to be influenced by your strategies.
Additionally – and I couldn’t even begin to tell you why – a lot of players in the B2B market seem to use very passive advertising techniques. Consumer marketing strategies, in my experience, work VERY well when selling to businesses. All the more so because the competition isn’t using them.
(More on this subject in PART TWO…)
- Consumers don’t like to be sold to
…Business people expect to be sold to.
Between Facebook ads, telemarketing and endless commercial breaks, consumers quickly become fed up with advertising. Business people, on the other hand, are exposed to far less B2B advertising, making them less fatigued by the marketing they see.
There is also, I believe, a heavy dose of “reciprocation” that exists in the B2B market that isn’t being tapped.
If you’re unfamiliar with the marketing concept, reciprocation is the theory that when someone does something for us – even if we didn’t ask for it – we feel inclined to offer something in return. It’s why charity letters come with free pens and personalized stickers, and why free trials are so ubiquitous. When a business gives us something for free, it can influence our decision to make a purchase further down the line.
In B2B sales, this is even more effective because business people are, themselves, trying to sell to others. As a consequence, they’re generally more relaxed about people trying to sell to them in a business capacity. If nothing else, sales and marketing is just more a part of their language. They understand it, they expect it and they’re less troubled by being sold to, directly or indirectly.
Are you beginning to see the possibilities here? B2B selling, when carried out using the same strategies as B2C selling, is often easier and comes with greater profit margins.
Why WOULDN’T you consider making B2B a key part of your business?
There is one way, however, in which consumers and business people are the same?
Consumers and business people BOTH want an easier life.
Keep this point in mind when reading the next article in this series, in which I’ll reveal the business model that hooked me into the B2B market, and how I used marketing psychology to take a business from zero to $60,000 / year with virtually no advertising spend or infrastructure costs.