After a quarter century in business-to-business marketing, I think I’ve finally figured out an accurate, authoritative answer to the question, “What’s the difference between business-to-business marketing and business-to-consumer marketing?”
The answer, in my opinion, is this: The business buyer needs your product — the actual, physical product, not just its benefits – and wants to spend his money on it.
Yes, the benefits are critical. But he needs more than just the benefits or advantages; he also needs the product itself — a fax machine, personal computer, domain name, credit line, pollution-control system.
The consumer wants the benefits your product delivers, but does not want the product itself. Nor does he want to part with his money to obtain it.
Let’s compare two products, one business and the other consumer. The consumer product is a monthly financial newsletter that tells individual investors what stocks to buy. The business product is a valve used in the chemical process industry.
In the case of the valve, your customer, an engineer — let’s call him Pete — is not merely looking for a set of benefits (e.g., the ability to control fluid flow). Pete is looking specifically for a valve. His processing plant uses many valves, and when one has failed or the plant is being expanded, he needs another valve. Nothing else will do.
Pete wants to buy a valve — the physical product — and he knows what he wants. He most likely does not have to be sold on the idea of using valves; he already uses them. (Yes, there may be exceptions, such as when another piece of equipment could be used in place of a valve.)
Pete does have to be sold on whether to buy your valve versus another brand or model. Though Pete may have a budget that constrains his selection of valve manufacturer and model, he is not opposed to the idea of spending money on valves. He does not resist it.
As a plant engineer, spending money on valves is part of Pete’s job description: to not buy valves would be paramount to a dereliction of duty — the duty to keep the plant operating reliably and efficiently. So Pete wants to buy, and he wants to spend his company’s money to acquire this product.
Now let’s take Pete’s father, Tom, also an engineer but now retired. Tom spends a good part of his retirement, as do many white-collar men who have been successful, managing his stock portfolio and other investments. (I am not being sexist by saying “men”; the majority of subscribers to investment newsletters are men older than 60.)
Tom has several things he wants. One is to make money with his stocks. Another is not to lose the gains he makes. So he desires profit and safety.
Tom does not need a stock market newsletter; thousands of Americans trade stocks every day having never subscribed to a financial advisory. As Bill Bonner of Agora Publishing is fond of saying, “Nobody wakes up, shakes the other person sleeping in the bed, and says, ‘Honey, we need to get more newsletters today!'”
What Tom seeks is the benefit of the product – increased stock market profits with greater safety. He does not need the product. But more than that, he does not want the product itself – eight to 12 pages of paper with ink on them.
That the product is a newsletter may well be a negative to Tom. He may feel he already has too much information to read, and no time for yet another publication. He wants the benefit, but not the physical product itself.
Unlike Pete, who is mandated to spend his company’s money on valves as part of his job, Tom would rather not part with his money to get the benefits (greater portfolio returns) he seeks — if he can help it.
Many other information providers offer financial advice in print and online at much lower cost than your newsletter, and a good number of them don’t charge at all. If Tom thought that free information would help him meet his investment objectives as well as your stock market newsletter would, he’d take that free information and avoid ordering your newsletter.
But Tom is suspicious of free advice; he believes “you get what you pay for.” He also thinks that many of the sources providing him free investment advice — stockbrokers, for example — are not objective and have self-serving motivations.
Because you charge for your advice and supposedly are unbiased (your consumer newsletter carries no advertising), Tom is willing to pay $100 to receive your publication, even though he would prefer not to spend the money or have another newsletter to read.
Amazing, isn’t it?
