In most cases, in Germany at least, customers are categorized as A, B or C customers based on the volume of business. At first, this appears logical but at a closer look more factors should be regarded:
- business volume in relation to the customers total budget
- the customers growth plan
- marketing prestige
Just looking at achieved business volume is a very one sided view of a customer. More important is the size of the customers budget, assuming that there is no reason why you should not expand your share. Some customers will clearly grow rapidly and these need to be handled with particular care since this is a chance to establish contacts and loyalties which will keep competitors out when the company grows and more people are involved in purchase and development decisions. Some companies have a lighthouse function in their industry which makes them a generator for new business if they can be referenced.
Basically, there is nothing wrong with an ABC analysis, but the process for the classification needs to be well and clearly defined and classifications should be reviewed at least annually.
The main argument against the ABC classification, is that C customers tend to be ignored. This would lead to problems, since the rule that 20% of customers create 80% of revenue will always apply. Cutting away the C customers will only reduce revenue – it will not change the 20:80 relation!
Tags: B2B, Customer Value
What prospects and customers look for:
- Information on potential suppliers and their products
- Relevant comments and reports from other users
- Supplier independent discussion platforms
What B2B prospects and customers do not want is a sales pitch, for that they can go to the suppliers web site. Many groups in XING have mutated to sales platforms, which is not what social networking is about.
What B2B suppliers want:
- Background information on persons involved with purchase decisions
- Visibility resulting from discussions and comments
- Market background information
- Real-life contacts resulting from social network activities
These requirements are not incompatible, but there is a numbers problem. While individuals looking for information can research on a specific topic when interested, suppliers need permanently to monitor these activities. Also the number of people gathering information will always be considerably higher than the number of employees available for monitoring social sites. The effort involved in monitoring is immense.
Evidently, there is a need for automating these processes, which is where CRM software comes in. As may be expected. Salesforce as a cloud oriented supplier has announced several functions, most of which are still in development. Other companies, Pivotal for example, have announced plans for integration with twitter, linkedIn and facebook. The solutions offered are oriented towards gathering information, which is fine but is only a time saving function for sales and marketing personnel who would otherwise research the information directly.
After saying that automation is required, there are some major challenges to master. Firstly, the amount of information available is considerable and only a small part of the information available will be relevant. Secondly the behavior of people active in the social web world is changing rapidly and there is no reason to suppose that this will change during the next years. Finally, marketing gurus will say that there must be a dialogue between suppliers and the outside world. All this makes automation more a dream than a realistic aim
Common to B2B and B2C is the aim of steering people to the company web site, assuming of course that the web site offers support, forums, customer information platforms and order processing. At this level, processes can and should be automated. The message I am getting to is this. CRM B2B applications may be loosely linked to social sites, the really import interaction is that between the CRM solution and a modern, functional internet presence.
Tags: B2B, Social CRM
This is a difficult topic. Both platforms, linkedIn and XING have recognized the need for B2B connections by introducing company profiles and enterprise groups. These facilities are used by many companies and provide a basis for the exchange or information between employees and other group members, mostly with very professional design and guidance. This is also the case for those companies offering products which are clearly not for consumers, for example Scania and IBM.
Company profiles do not offer more information than the company web sites, but groups do allow a new kind of interaction by making it easy for members of the community
- to exchange information amongst themselves,
- to learn from employees who may not be available through normal support channels
- and to involve other community members who have something to contribute but would not normally register on the web site of the company.
Many of the groups are technically oriented, providing interesting opportunities for open innovation.
Profiles and groups need to be permanently monitored and guided to be successful. This costs time and effort. It remains to be seen if returns offset the costs involved. Since returns are hardly quantifiable, the ROI cannot be measured. This is similar to value of presentations at exhibitions – the costs are known, but the effect in terms of sales remain questionable.
Tags: B2B, linkedin, Social CRM, xing
For smaller companies lead generation is a major issue. Not being able to invest millions of advertising dollars or euros, they are not as visible as large companies. At the same time generating leads by telephone or personal contact is not only time consuming and costly but also increasingly ineffective. Buyers have access to all the information they require on the web and studies show that for large companies 67% of new leads are generated when buyers contact suppliers. Of course, only visible suppliers are contacted.
Many years ago (very many) it was believed that the world would beat a path to your door if you had a good product. If that were ever true, it only applies today for companies which lay an internet track to their door, which is where CRM comes in, or should come in, but does not. MarketingSherpa has some interesting ideas on what to do.
Tags: B2B, Lead Generation, SME
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