Let’s start by defining B2B.
According to Wikipedia “Business-to-business (B2B) describes commerce transactions between businesses, such as
between a manufacturer and a wholesaler, or between a wholesaler and a retailer. The overall volume of B2B
(Business-to-Business) transactions is much higher than the volume of B2C
transactions. The primary reason for this is that in a typical supply chain there will be many B2B transactions involving sub components or raw materials”.
Regarding the acronym SME the
European Comission says that "the category of micro, small and
medium-sized enterprises (SMEs) is made up of enterprises which employ fewer
than 250 persons and which have an annual turnover not exceeding 50 million
euro”.
This type of business has some special
characteristics that make it have to often face unique challenges. Let’s review
some of them:
Sales cycles and specialization
Sales cycles
and learning curves are typically much longer than in B2C. Let’s think ie in a
small automotive supplier. Frequently the
number of customers of this kind of enterprises is quite small. However
although the target audience is usually smaller than in B2C, yet multiple
people from different departments and levels within the company are involved in
the buying process (Engineering, Maintenance, Procurement, Operations, etc.). This
means that SME need people with accurate profiles capable to interact with line
managers, maintenance workers or senior engineers at the same time that they
deal with the commercial process (in many cases it can take more than 1 year)
and educates the customer’s staff. The challenge is obvious: by definition a
SME has a small number of employees but they have to be prepared to deal with all
this.
Marketing
As hinted
before a B2B marketer needs to engage
its customers and prospects throughout a complex customer life cycle that
frequently lasts longer than a business-to-consumer (B2C) life cycle. As if
that was not enough great numbers of B2B
companies are not in direct contact with their end-customers. B2B Marketing
Strategies are often “push” rather than“pull” and this generates a certain lack
of market knowledge.
And
something else: SME are not embracing (at least not enough) the power of Social
Marketing. Over half of
B2B companies are not tapping into social media’s potential as a lead
generation tool. However a recent Forrester survey
pointed out that some 48 percent of B2B social marketers plan to increase their
lead generation usage of LinkedIn discussion groups and pages, due to the high
usage of LinkedIn by senior decision makers. At the same time B2B marketing has
historically relied on below-the-line interactions – interactions that social
media can take to a whole new level.
Channel strategy
Whether the
company is part of a great brand distribution channel or it needs to develop
its own channel to sell their products, developing a
suitable channel strategy is key for a SME to be successful. In the first case, the
manufacturer will audit the SME for commercial, technical and financial solvency
and, believe me, this is not an easy task.
In the
second case, the SME should do the same with the candidates to become part of
its distribution channel. However, due to resource constraints and capabilities
it is not always done in a professional way.
On the other
hand, it is very important to develop a very
aggressive policy of innovation and added value for the dealer. If not there
is a high risk: our partner can be tempted to abandon us when we need him most
and become our competitors after investing many resources in training.
Of course,
there are many other challenges that a B2B SME must face (talent
management, productivity, communication or strategy among
others) but those addressed in this post are probably the most critical factors
for the success of the company.
