Are you going about your B2B marketing all wrong? CEB’s Karl Schmidt explains why the real driving factors behind B2B buying decisions are far more personal and emotional than you think.
Uncovering the Underutilized Power of Emotion in B2B Marketing
When it comes to making purchasing decisions, we all know our choices aren’t always based on logic and reason. Why do you think they keep making red sports cars with terrible gas mileage and keep putting candy bars near the checkout?
Of course, acting on a last-second impulse purchase is one thing, but what happens when we’re forced to make a decision on a product or solution that could make or break our business? What happens when that involves navigating a complex buying process, requiring us to loop in multiple stakeholders across various departments, or when it takes maybe a year or even longer to finalize the purchase? Surely with everything riding on that kind of decision — not to mention with that amount of time to really think things through — our approach becomes more rational than emotional…
After all, it’s strictly business, right?
From Promotion to Emotion
Wrong. According to the surprising findings in “From Promtion to Emotion: Connecting Customers to B2B Brands,” a whitepaper from CEB in partnership with Google, when it comes to making the purchasing decision, the personal value a B2B solution offers has 2x the impact of the business value it provides. Not only that, CEB’s findings also show that B2B customers are in fact much more emotionally attached to the brands they purchase from than B2C customers are.
How personal and emotional is B2B buying? It turns out the answer is very. And if you’re not targeting your marketing accordingly, you’re missing a huge opportunity to really resonate with your buyers and to help guide them more effectively down the path to purchase.
This Week’s Guest
“If we think about the risk we take on from making a large [B2B] investment…we’re talking millions of dollars. These are career-altering type risks and if we don’t think about what it takes to overcome that risk, from a personal, emotional perspective…then we’re missing where we as marketers should really be focused.”
— Karl Schmidt, Practice Manager at the CEB Marketing Leadership Council
- Do customers feel closer to Cisco than Apple? When it comes to having an emotional connection with buyers, B2B brands actually score higher than top B2C brands. [3:10]
- Personal risk plays a huge role in influencing a B2B buying decision: Think about purchasing an iPad in comparison to investing in a CRM solution. [5:20]
- Marketers need to “win the elephant and the rider”: Appeal to both the rational and emotional side of B2B buyers. [9:55]
- Don’t let your buyers end up in the “unhappy valley”: Avoid limiting your emotional messaging and engagement to the demand generation stage. Connect with your buyers on an emotional level throughout their entire journey. [15:02]
- Personal value has 2x the impact on the buying decision than business value. Decisions can often be influenced by effectively answering questions like, “Will this purchase make my team more successful?,” and “Will it make me viewed as a strong leader?” [19:20]
- The big opportunity for B2B marketers: This opens up a window for marketers to really resonate and differentiate themselves from competitors. [22:25]
- One company pushing all the right personal and emotional buttons: Xerox is a great example of a company taking advantage of promoting personal value and developing a strong emotional connection. [25:00]
Labcast 130: Getting Emotional with B2B Marketing featuring Karl Schmidt from CEB
Subscribe to Labcast
Announcer: This is Labcast, insights and ideas for the expansion-stage senior manager, hosted by OpenView Labs.
Jonathan: Hello everyone and welcome to Labcast from OpenView. On this week’s episode, we’ll be discussing one of the latest reports from one of the most respected sources of business insights around, CEB.
Listeners may recall that we’ve had some members from CEB with us here in the past, including Matt Dixon and Brent Adamson. They’ve talked a lot about all the great resources CEB has conducted around Challenger Selling and Insight Selling.
Of course, Matt and Brent are authors of the extremely popular and much discussed book,The Challenger Sale, but CEB has also been producing fantastic resource around marketing, specifically around how B2B marketers can apply insight principles to attract and guide prospects through the many twists and turns of the B2B buyer journey. And that’s something I’m really excited to be discussing with our guest today.
The big case in point, their latest report, “From Promotion to Emotion Connecting B2B Customers to Brands”, completing a partnership with Google. So, here to talk with us about some of those key findings of the report is Karl Schmidt, Practice Manager at the CEB Marketing Leadership Council. Karl, thank you so much for joining us.
Karl: Jonathan, thanks so much for having me.
Jonathan: As mentioned, I’m really excited to talk about this subject. I think there’s a lot of really interesting points that you hit on in the report, but one thing that really jumps out at me right from the get-go, it really sets the tone for the report and what it’s all about, I think it’s right there in the title.
It’s that word, emotion. Because, Karl, emotion and B2B, they aren’t really two words we typically hear associated together too often, but what your findings suggest is that B2B buying can actually even be more personal and more emotional than B2C. And I know that’s something that a lot of people reading the report, it’s become a surprising finding and a really hot talking point about it. So, can you go into a little bit more depth about how you determine that and what it means for marketers?
Karl: It’s a very important finding and one that has been getting quite a lot of press and is a little bit, as you said, surprising. We hosted a number of our CMO’s at our conference in Vegas, and we got some really shocked and disbelieving responses from even some of our most progressive members. Because the traditional wisdom is that we build these strong emotional connections to our B2C brands, but we don’t think about our B2B brands in that same way.
But the data is very clear. In the presentation that we’ve made available through a microsite, slide eight highlights why B2B buying is so very personal.
On the left, you see the B2C brands that have the strongest emotional connections with their consumers. For comparison, we studied a group of thirty-six B2B brands across seven different industries, and how they connect emotionally to their B2B customers. The data could not be more stark. The highest scoring B2C brands here are your Apples, L’Oreal, Amazon, Nordstrom. This group at most achieves emotional connections with their consumersin the neighborhood of forty percent while the very lowest scoring B2B brands that we studied using the exact same methodology, were at that forty percent level.
It’s fascinating that your Ciscos, your Oracles, your FedExs, your Deloittes, all of these organizations have a much stronger emotional connection with their buyers than the corresponding B2C brands have with their buyers. Your question about how we studied this is really important.We partnered with an organization called Motista that gets very deep into this question of emotional connections, and has surveyed hundreds of thousands of B2C consumers, and they were very excited to partner with us to look at the same dynamics for B2B buyers, which is a space they really hadn’t looked at previously and has really been under-investigated. This allowed us to use the exact same methodology to investigate how B2B buyers are feeling and thinking about these purchases and found that these emotional connects are so deep.
But if you reflect why that might be, then comes the immediate “a-ha.” If you look at the right-hand of that same slide, you see the relationship between the personal risks that a B2B buyer experiences and the degree to which that drives some of these emotional connections.
Let’s think about the potential risk any of us take on as a B2C consumer. Buying an iPad as a great example. Sure, it may not do all the things we wanted or we may have a tough conversation with our spouse why we wasted money on the thing, but the relative risk is actually pretty low. But as executives, if we think about the risk we take on from making a large investment in a CRM solution for example, we’re talking millions of dollars. These are career-altering risks. If we don’t think about what it takes to overcome that risk, from a personal emotion perspective, then we’re missing where we as marketers should really be focused.
Jonathan: Right, and it’s such a good point. I mean, a lot of these B2C companies, the personal risk is very small where as you point out, a lot of these B2B solutions, not only do you have to make the right decision or it could mean your job, a lot of these aren’t just spur of the moment choices too. I mean, you’re having a lot of interaction, you’re reading a lot, you’re studying a lot, it kind of makes sense, these decisions and buying processes being so long in some cases. It does make sense that you’d develop more of a connection too.
Karl: Absolutely, and that’s where one of the questions that we get often is, did we normalize the data? I’m a researcher and we spend a lot of time looking at the data, so apologies if we get a little geeky at this stage.
Jonathan: Oh, let’s do it.
Karl: It is important to question whether these B2B purchases are really a fair apples to apples comparison to the B2C purchases. That’s why westudied a range of degrees of consideration and price points for those B2C brands, to make sure we were having those direct comparisons. And that’s why we included brands like a FedEx or UPS where an individual shipping purchase might be at a lower level expense, and a Grainger where the average purchase price is only a few hundred dollars.
So, we did make sure to include a range of B2B price points in our study, and what was interesting is, even when we normalize for the degree of consideration including price, we see that two purchases, B2C versus B2B, with the same price, the same degree of consideration will have very different levels of perceived risk. The emotional connection that a B2B brand needs to provide to overcome that risk requires a much higher level of personal value and emotional connection between that B2B brand and that buyer.
Jonathan: So, that’s really interesting, and then that raises a lot of questions about, what are marketers doing about this? Is some of their approach kind of misguided or, as you put it, are they missing out on some key opportunities then? Because the traditional approach is coming at these solutions as “business is business.” Emotion doesn’t really play into it that much and this is one of the big points that you’re making with this report is that it absolutely does, and so, what are the opportunities that marketers can be taking better advantage of?
And one of my favorite analogies that you use when you’re talking about this is, the importance of appealing to both the rational and the emotional side of B2B buyers, and you call this “winning the elephant and the rider,” which I think is great. It illustrates the point really, really well. So, can you explain what you mean by that and how important it is to strike the right balance of appealing to the rational side and the emotional side at different stages in that buying process?
Karl: Absolutely, and it’s an important metaphor that hopefully helps sets the right framing for how marketers can then attack these problems along with their commercial partners in sales and elsewhere in the organization. So, let me just spend a little talking through how we think about this elephant and rider metaphor.
Karl: And we can’t take credit for inventing it. The work originated from, Jonathan Haidt, as well as Chip and Dan Heath, particularly their book, Switch.This metaphor uses the elephant and the riderto think about our human brain and how we’re wired to make decisions. There are two parts. One is the rational, the conscious, really the deliberative side, and we characterize that by the rider. The other we’ll characterize as this more emotional, visceral, almost automatic, and we’ll characterize that as the elephant.
One might presume that because the rider is holding the reins, that the rider is in control or at least has the appearance of being in control. That’s the rational side in all of us. We’re wired to make those rational decision based on logic, data, credible evidence, all those things that we as B2B marketers have always focused on. And it makes sense why we would, but we can’t ignore the elephant, that emotional side, the part of us that acts, or all too often fails to act, because of the influence of feeling, gut instinct, et cetera.
And many of those things may even be happening subconsciously and we’re largely unaware of them. So while the rider and the elephant, the rational/emotional, won’t necessarily be in constant open conflict, there’s also no guarantee that the two will agree. This is where we will maybe know what we should do, but don’t necessarily do it. The classic example is every year, we make our new year’s resolutions and we say, “Hey, this is going to be the year, I’m going to get more fit, I’m going to diet, I’m going to exercise,” but to break from that status quo of prior behavior, that’s where we see the absolute need to include the emotion. And that’s where, we see it the analogy as very powerful. You have a very small rider and a very big elephant. And if the two disagree, who’s your money on? The elephant.
Jonathan: Exactly. Exactly. You raise a good point too, that it’s not just the decision to make sense and also make you feel warm and fuzzy inside and good, although that’s important. It’s, in some cases, even more important that it’s addressing these negative emotions, the fear of change, the fear of what could happen if things don’t go well.
Karl: Absolutely, and if you don’t overcome those things, if you don’t address those risks, if you don’t address the things that really are the motivators for the elephant, then the rider can pull on those reins all day and you’re still not going anywhere.
Jonathan: Right. And now one thing that you bring up too, is this concept of the “unhappy valley.” And I think you bring that up because that’s when you’re discussing the importance of balancing these messages and how appealing to the elephant early on can be productive, and then at some point too, you’re going to have to shift back over to the rider, but you have to have a good balance throughout, and so can you talk a little bit about avoiding the unhappy valley?
Karl: Tthis is actually a topic that we’re going into more depth as part of our research for 2014 that we’ll be previewing for our membership later in March. So, some of this is still a bit work-in-progress. As marketers, we’re aware of the power of emotion. This has been well-known, well-studied, well-trodded terrain, particularly on the B2C side for many years.
Quite a few of those emotional tactics we’ve been using on the B2B side. At the top end of our demand generation funnel, we often think about, what we need to do to get attention and often we appeal to emotion to do those things.
But what’s interesting is if you take this emotional connection approach and analyze buyers at different stages of their purchase journey, you see a shift. Unfortunately you see a very disturbing trend where early on, you see much higher scores on emotional and personal connection attributes that degrade as that customer goes along that purchase journey, and that’s why we termed it “unhappy valley.”
Where you would anticipate the potential need for the greatest emotional connection, the greatest stimulus to that elephant to get them to take action is when they’re going from considering if there is a problem to really trying to get consensus around a solution, and ultimately a supplier. Those are the stages where those emotions, where those personal value connections are at their lowest.
We as marketers haven’t been utilizing the tools in our toolbox for driving those emotional connections sufficiently at those stages. Sure, at the beginning, we do some things around emotion to drive attention and get the discussion begun, and absolutely our sales teams are using every emotional lever you could imagine to close the deal at the back end, but in the middle, where all too often deals die and stall, that’s where we just haven’t been paying enough attention.
Jonathan: Right, and it almost, so many things bring to mind the correlation to dating. And that’s, you know, you start off, everyone’s feeling very warm and good about things and then, it sounds like part of the trick is making sure that you’re keeping the fire alive. That it’s not just providing prospects in this middle stage with analytical information, but also just maintaining that emotional connection too.
Karl: That’s right. It’s the maintaining and growing. We spend a good deal of time studying how B2B marketing organizations have executed campaigns. We’re finding a number of examples particularly upfront where there are effective things being done, there just isn’t that follow-through, to maintain and build and foster those relationships.
Your analogy of dating to marriage is a very effective analogy because it’s not a one-shot grab for attention, to pull that heart-string. It needs to be much more of that consistent approach that allows for that relationship to not only be sparked, but over time, to grow, and the consistency required to ensure that it’s fostered appropriately.
Jonathan: Right, and by growing, then fostering a deeper sense of trust which then allows you to make more difficult decisions when you’re really moving closer to pulling the trigger. So, one last thing I wanted to talk with you about was one big step that’s really jumped out, and I think this has gotten a lot of attention too from the report, and that is that B2B buying is personal.
So, not only are buyers having a surprisingly emotional connection, much more emotional connection to brands than we would’ve thought, there’s this idea that the value they’re getting from the service is, much more personally relevant than maybe a lot of people think about and so the stat that’s important is personal value provides twice the impact that business value will on a B2B purchase. That’s a big stat and I think it’s gotten a lot of attention and a lot of people are looking at that and so, can you clarify what that distinction means and maybe offer a few examples of how B2B companies can appeal to customer’s personal needs?
Karl: This is the thing that honestly surprised us the most. Not that personal value wasn’t important, that it wouldn’t also help create lift and drive commercial outcomes. We expected it to be important similarl to how business value is important. But the fact that personal value proved to be twice as powerful was really quite shocking.
To understand a little bit better the “why” and “how”, we’re looking at that more deeply this year. I should give a little more definition of terms. Business value is pretty well understood. It’s that value we demonstrate as marketers at an organizational level to would-be buyers. Generally, enumerated using ROI calculators, we’re talking about things easily measured, typically in dollars and cents, and those are things that are largely driven by the functional benefits that we have included in our offer, and the business outcomes that those buyers receive as a result.
Marketers have been successful at proving value to their prospects and customers over the last few years. We looked at fifteen different commercial outcomes, everything from awareness to willingness to purchase, willingness to pay a premium, loyalty – a broad swath of commercial outcomes that marketers care deeply about. And we looked at the lift that business value drove relative to these personal value attributes. Personal value attributes include those emotions we’ve been talking about, including aspects of confidence, even excitement or happiness, some social benefits like will this purchase make me popular with my team? Will it make my team more successful/make me be viewed as a stronger leader? And that gets into some of the professional benefits that might be accrued to an individual stakeholder within that buying organization. Of course, there’s also those practical benefits to the individual person around their ability to do their job more efficiently. So there’s a broad range of personal value benefits that we studied. In total, across that group of personal values and comparing them to the similar group of business value attributes, we were really surprised to see the personal value attributes prove almost twice as impactful in terms of the lift generated for that broad range of commercial outcomes. And that’s been, as you mentioned, one of the biggest, most impactful data points that came out of this study.
If you reflect on why would this be, you come to something that’s really important particularly our members that have been on the Challenger journey that you referenced earlier. Any organization that’s focused on selling and driving commercial success from a core insight is looking for insight to identify where they can truly provide that differentiated offer relative to the competition.
So many of us are facing very commoditized marketplaces where our ability to differentiate from the competition exclusively on business value is harder and harder. One of the stats in the study is the degree customers see real difference between suppliers and value that difference enough to pay for it. 86% of would-be B2B buyers report that they do not see enough difference between suppliers to pay for that difference.
Jonathan: Right, which is another huge stat and I mean, that’s got to be keeping some company execs up at night, I’m sure.
Karl: Absolutely, and that ties directly to this business value versus personal value dynamic because all too often, we as marketers are focusing exclusively on sources of business value as our basis for differentiation, and ignoring the potential for creating some of that differentiation through these personal value opportunities. That’s where we see a great opportunity for marketers to expand where they seek those opportunities for differentiation, and we found some great examples as part of this work that we’d be happy to talk about a bit more.
Jonathan: Absolutely, and you know, people can see those examples. I know included in the report, you’ve included some great case studies including John Deere and some other big name brands that you’ve found a lot of information on tied to these finding, and I think one of the key things that jumps out to me when you’re talking about this, is that it’s a big challenge for B2B marketers. These stats are challenging them to kind of rethink their approaches, but with that challenge is a big opportunity.
Karl: That’s exactly right, and that’s how we think about our research and how we create value for our members here at CEB. First and foremost, we have to identify, what’s different. What maybe we as an industry have missed, butif we stop at the research and the data, it would be woefully insufficient. A big part of what we deliver at CEB are these best practice cases and tools to help our members get after what to do about these new breakthrough findings.
Among the examples that we found there’s a great case study from John Deere that you referenced, the one I might point to first is the Xerox example, which emphasizes how Xerox thought about winning both the elephant and the rider to personalize their core insight for a particular audience. The audience they were looking to mobilize for change was their teachers.They took a fundamental insight on the role that color plays in helping children learn and emphasized what having more engaged, exciting students motivated teachers.
The video is really compelling as testimonials from teachers talk about how great it is to have students that really are excited about learning and the role color plays in all of that. Oh by the way, who is it that’s going to be your best provider of color printing services when it comes to the K-12 space? That leads you right back to Xerox. So, we find that an impressive example of not just how Xerox delivers business value to make sure it’s cost effective, so it does satisfy the district superintendent, and the finance folks as well. But it really nails the value to what we all care about from an education perspective – successful outcomes for individual students and their ability to learn and what that means for the teachers and the other players that are key to the big picture. That’s why we love the Xerox example. We think it’s a really powerful way to include both that emotional connection and the enthusiasm, excitement those teachers feel, and why they got into teaching in the first place. This is where we see many B2B’s having an opportunity to go so much further than they have today.
Jonathan: You’re absolutely right, I mean, that’s such a terrific example, especially just focusing on boarder benefits and value over specific features. And it’s touching on a wide variety of the people, the different people involved that their product touches, not just one quarter one. It’s a really fantastic example.
Karl: We’ve really been impressed with Xerox in a range of areas. One of the workshops we’ve developed for our members is around the topic of content marketing, which is another subject I’m guessing much of your audience cares deeply about.
Xerox has done a really spectacular job in taking these core insights, and then appropriately decomposing them to leverage them quite broadly across a range of different channels, through a range of media to reach that broad set of stakeholders that ultimately they’re trying to influence. That Xerox case in particular is one I would definitely point to as something that gives a broader perspective, not just on some of the questions we’re talking about today, but some of the things we’re also looking at when it comes to that broader topic of Challenger Marketing and insight selling.
Jonathan: Right, and Karl, I think there’s so much here that we could be talking about and I really appreciate you taking the time to explain a little bit about the thinking behind the report and some of the findings here. For our audience, we’ll be including a link to download this report right here on the podcast page, and I highly encourage you to check that out along with all the reports that CEB produces.
No one really does it better than you guys. A ton of incredibly relevant insights, actionable tips, and really fantastic research coming from you guys around marketing and sales, can’t really recommend it enough. So, Karl, you were mentioning throughout our conversation that there’s some additional research you guys are conducting right now and looking to release later on in the year. Can you give any suggestions for when and where people should be looking for that?
Karl: Yes. We roll out our research first to the CMO’s, to our members, and their teams, so that will be happening over late first quarter but the majority of second quarter. Subsequent to that some will start becoming available from a public domain perspective. So, more to come. We are increasingly looking for opportunities to share our findings, with a broader audience because we appreciate how many people are really struggling with these very difficult challenges and are very happy to spend the time talking through channels such as OpenView Labs to get the word out. There are some really big changes happening right now and some great discoveries in the B2B space that we want to make sure as many marketers as possible can take advantage of.
Jonathan: Great. Well, thank you so much again, Karl, and love this report, really looking forward to your future content and hopefully, we can reconnect and do this again sometime soon.
Karl: Absolutely Jonathan. I enjoyed it very much.
Download the Full Whitepaper from CEB and Google
Photo by: eltpics