6 Marketing Myths

In talking to potential B2B clients, Dick and I frequently come across “myths” or “misconceptions” on the part of management.  As a result, part of our sales time is spent in debunking these myths and setting the record straight.  I thought I would share some of the more common ones.

  1. Lessons learned and tactics used in a vertical (or sub-vertical) can be applied to the next vertical with little added investment and matching success. For example, some decision makers believe the same approach used in the K-12 market will apply to the college market, or selling to an ISP is the same as selling to a large enterprise.  Were it only that simple.  While market segments may appear to be the same, on close examination the buying motives, timing and requirements are markedly different.  There is no guarantee that what has worked in A will work in a “related” segment/vertical B.
  2. Price reductions lead to increased volume and market share or the old “we’ll make up the lost margin on volume belief.” While this may hold true in some consumer markets, the vast majority of B2B buyers go for value and the fulfillment of specific needs.  Price is frequently low or last on the buyer’s mind.  Key elements to the B2B buyer are; resolving a problem, reliability of the product, service, reputation/longevity of the seller and then price.  In short value trumps price.
  3. We know that 80% of our revenue and profit come from only 20% of our customers, and therefore we can adjust our Marketing to serve the 20%.   The Pareto rule, which appears frequently in B2B markets (and sometimes is really 90/10), means that you are vulnerable to a few customers.  If these go out of business or switch to your competitors, your revenue will drop significantly, usually faster than your expenses, and you will end up out of business.  Once a firm has reached a certain size or volume, it must expand its customer base to ensure long-term success. Marketing to the 80% is a requirement.
  4. We can cut back on Marketing (Promotion, Product Management, PR, etc.) during this recession because we have loyal customers.  Wrong.  Customers are not loyal, and despite your belief that switching costs are high, if there continues to be downward pressure on margin your customers are going to look for solutions that help them react.  If they don’t hear from you, and see your new product, they may assume that you have nothing new and go to a competitor.
  5. Social Networking (Blogging, Facebook, LinkedIn, etc.) is for consumer products. Wrong!  Very large successful companies like Cisco, Dell, EMC, GE and others have embraced social networking.  As a result they have saved money, increased market share and customer satisfaction.  Many of the same tactics and techniques that these larger companies can be used by smaller companies to maintain their positions and grow.
  6. We sell to the end user.  Not true! The end user provides information on pain-points and what feature/functions a product must have.  Resolving these issues is the mark of a successful product.  But in the B2B world a sale is made to an enterprise, which often consists of responding to an RFP and/or selling to a buying committee.  In addition, this may be done through a re-seller or distributor, who needs to be sold on your company and solution.  So, in the B2B world selling is done to many people, on many levels, where the end user may only be an influencer in the final decision.

Difficult economic times make it hard for management to make a decision and to act, as the consequences of doing the wrong thing can be expensive and potentially fatal.  Of course not acting can achieve the same result.

Are myths restricting your behavior?  Do you have goals to grow your customer base, reach new verticals, and increase your Marketing expenses in 2011?   If not, I would like to hear what about what you are going to do.  Comment below.

RHM  9/30/2010

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>