The Case-Based Approach to B2B Marketing By Steve Minett, PhD Drawing on the work of the sales theorist, Neil

Rackham, this article argues that B2B marketers should adopt a case-focus. It bases this on a discussion of meta-value and introduces a lock & key metaphor for B2B transactions. It also looks at macro & micro differentiation and the use of case stories as market reaction research. (The article is an edited extract from Dr Minetts book B2B Marketing a Radical New Approach for Business-to-Business Marketers, Financial Times/Prentice Hall, 2002, further details below) Why a Sales-Based Model? We can begin by addressing the question why Rackham's sales-based model should be relevant to B2B marketers. Some may asked why, in a book aimed at marketers, should so much space be devoted to a sales theorist. There are, I believe, several cogent responses to this question. First, personal selling is clearly crucial to B2B marketers, in contrast to their consumer counter-parts. Second, as I hope Ive been able to make clear in the last section, Rackham (as he emphasises himself) is very much more a researcher of the purchasing process rather than a conventional sales theorist. Thirdly, this crossing of a disciplinary boundary is hopefully a healthy example of the general trend toward the breaking down functional silos originally erected, and traditionally defended, to protect pseudo-professional rights to particular turfs. In B2B in particular (and maybe also more generally in marketing), with the communication technologies available today, it may be time to ask where the boundary between sales and marketing actually is and whether its meaningful to go on defending it. (I know from personal conversation that Rackham, for example, regards his current work as being as much concerned with marketing as with sales.) Decision Criteria & Meta-Value But there is another and more important answer to the question of Rackham's relevance his concept of decision criteria. As we have seen, these are critical aspects of B2B transactions. Why are they so important? Because they help to explain a phenomenon which is crucial in a capitalist market economy; the willingness of customers to pay more for a product than it cost to produce. This arises because the customer sees some extra value, for him or herself, in the product which cant be deduced from the costs involved in its production process. Carl Eric Linn calls this phenomenon meta- value: The difference between the cost of the product and the price asked for it then hides an immaterial, intangible added value connected to the buyer's interpretation of the product and resulting from the suppliers marketing and development activities.? Payment for meta-value is what provides the profits which drive capitalist societies. Consequently, generating meta-value has to be the over-riding aim of all forms of marketing. Meta-value as Lock & Key Linn links meta-value very closely with brand, whereas Rackham hardly mentions the word brand. What Rackham does suggest, however, is that B2B customers perceive meta-value when they find a product whose differentiators match their decision criteria; differentiators can be seen as a key searching for the right lock (set of decision criteria), see Figure 1. When the customer sees that they fit together, metavalue (and hence the customers willingness to pay a profit to the producer) are

released. Meta-value for consumers may amount to no more than a sense that acquiring the product in question will enhance their life-style aspirations. For B2B purchasers, on the other hand, the organisational constraints on their decision-making pre-dispose them to perceive meta-value in terms of competence to meet their particular decision criteria. Meeting these criteria depends on product differentiation. (See Figure 2) Rackham observes that while he is referring to the sort of differentiation which can be directly controlled by salespeople, the concept of competitive differentiation itself was originally developed in marketing: the objective of competitive differentiation is to make your product distinct in the customer's mind from other available alternatives.? In marketing terms, differentiation starts with product design, then continues through activities like pricing, promotion, and advertising strategy. Unfortunately, he says, most marketers lose interest at this point: When the product is designed, priced, and promoted, then marketing has done its work. But it's exactly at this juncture - when the product is ready to be sold to customers - that differentiation becomes even more important. This is where sales people take over the process of differentiation in interaction with the individual customer. Differentiation Macro & Micro Rackham introduces the term micro-differentiation to distinguish what sales people are doing from macro-differentiation, which is what marketing people do through activities such as pricing and advertising. Macro-differentiation is aimed at the whole market, or a particular segment, it doesn't come down to the level of the individual customer. Advertising, for example, will differentiate the product by emphasising those areas where the product is strong and which are likely to have the most impact on the majority of the buying population of the target market. If you have the good fortune to be in a market where all customers behave in precisely the same way, and where whats important to one customer is likely to be equally important to another, then your advertising would have an equally powerful differentiating effect on each customer. But, inevitably, customers differ. It is quite possible that the differentiator which has the most effect on one customer may be unimportant to another.? He goes on to say that the classic marketing tools of advertising and promotion, can give overall positioning to a product, but they can't come down to the level of the individual customer.? Case Stories as Market Reaction Research There is, however, an exception to this claim the classic promotional tool of the case story; by definition, this is based on the individual customer. Their relevance to this discussion is that a properly recorded case story should reveal both the customers decision criteria and how the products differentiators were able to fulfil these or failed to do so. This negative alternative alerts us to the reality that the term case story is not limited to accounts of successful sales which are written up and publicised for promotional purposes: in principle, every sales process conducted by the company is a case story even where the sale was unsuccessful. Even case stories in this sense should reveal decision criteria, and, where the sale was unsuccessful, why the products differentiators failed to meet them. From a marketing point of view this information is just as important. In summary, case stories, in this wider sense are an invaluable source of marketing information a very effective form of market reaction research. Very effective because, as

Rackham points out, criteria arise or evolve during the sales process which is often prolonged and has many stages. In effect prospects discover or formulate decision criteria together with the salesperson. Consequently, this type of market information cannot really be researched by conventional methods, such as opinion surveys, focus groups, etc. The Longevity of Decision Criteria Rackham stresses an additional relevance of decision criteria - their longevity: they are not only the key to perceived meta-value in the one-off sale, they also tend to live on in the customers mind, influencing sale after sale. Decision criteria may be developed during one particular sales process but once customers have evolved a set of criteria for purchasing a particular type of product, they are likely to use the same criteria when purchasing a similar type of product in the future. In effect, they become part of the customers way of structuring their business and purchasing realities a micro-world view for a particular product area. This specific-productworld-view will comprise both a set of beliefs about what is important in judging products of this type and also a loyalty to one, or a few, companies who are perceived to be capable of providing quality in this product area. In marketing terms, the ideal situation is clearly to influence prospects decision criteria in such a way that a structural bias in favour of your company is built into their habitual pattern of thinking about the relevant product area. (This is the most importance aspect of B2B branding. To re-cap this model of differentiation: the purpose of differentiation, in both marketing (macro) and sales (micro), is to make a product, or more accurately a product package (i.e. the features of the product plus its price, delivery terms, aftersales service, means of payment, etc), as attractive to as many prospective customers as possible. Ideally differentiation achieves this by providing a key that perfectly fits the lock of each prospects decision criteria. The objective of marketing is to provide a product with a master key, i.e. one that will fit the decision criteria of every prospect (or more realistically as many as possible) in its target market. Whereas sales people use differentiation on the individual level to forge a unique key for each prospect, in response to what they learn about that particular prospects decision criteria. What can be suggested here is that there is something between a master key and a unique key. This something-in-between can be discovered by generalizing from individual sales cases. Fig. 2) Meta-value for consumers may amount to no more than a sense that acquiring the product in question will enhance their life-style aspirations, while B2B purchasers perceive meta-value in terms of competence to meet their particular decision criteria. B2B Marketing a Radical New Approach for Business-to-Business Marketers, Steve Minett, Financial Times/Prentice Hall, 2002, ISBN 0-273-65425-X, www.business-minds.com [1560 words] Article supplied by Minett Media.