B2B Manufacturers: Focus Less on Products, More on Customers (Part 1)


Focus on Customers

The power that B2B manufacturers once had continues to disappear, experts told marketers attending the recent “Big Talk: The Stakeholder Value Chain” sponsored by the Institute for the Study of Business Markets (ISBM).

Customers complete more than half of the buying process before ever contacting a sales rep, attendees were told. In fact, the percentage grew right before our eyes, rising to 70 percent by the end of the conference.

But while B2B manufacturers become less important to the typical customer’s buying process, the customers themselves have never been more important to the manufacturers.

Where manufacturers once were able to concentrate on product features and benefits, they now need to focus on helping customers achieve business outcomes, said Amir Hartman, Co-founder and Managing Director of Mainstay Partners, and coauthor of the new book Competing for Customers

And that requires a long-term commitment to the customer – the kind of thinking reflected in the subscription business model started with SAAS (“software as a service”) and now spreading to other industries.

In fact, he notes, that while manufacturers once received 70 percent of the total revenue from a customer on day one of the relationship, that same percentage now occurs after the sale. Days, weeks, months and years after the sale.

Ways to Cope with the New Age of the Customer

  1. Stop focusing so much on the products themselves. Focus, rather, on the experience you want the customer to have.
  2. Ask customers what they want and need.
  3. Recognize that your value proposition is under constant competitive pressure, and may need to be updated from time to time.

One of the factors causing that shift in revenue is the Internet-of-Things, Dr. Phil Dover, Professor Emeritus at Babson Global, told the ISBM gathering.

“While power has shifted to the customer,” Dover said, “smart, connected products change the situation again,” with software-driven products altering the discussion in most companies from “What can we make and sell?” to “What else can we do for our customers?”

“Products are increasingly becoming complex systems that combine hardware, sensors, data storage, microprocessors and connectivity in many ways,” he said, unleashing “a new era of competition and business models.” 

That might include products that automatically update themselves with new software. Or remote diagnostics. The idea being that innovation focuses on improving or enhancing the customer experience instead of the product itself. Because if you’re helping customers reduce cost and risk, then you’re building customer loyalty.

Not surprisingly, the process of finding out what customers really want and need came up for discussion as well.

B2B marketers usually go right to their A-list customers, the “usual suspects,” Gerry Katz, Vice Chairman of Applied Marketing Science, told the group. But that usually produces predictable results and little insight. And results in “me too” products that fail to push the company and its technology to the next level.

In the same way the buying process is changing (and for many of the same reasons), many manufacturers are needing to revise their value propositions.

“Value propositions are going to amp up,” said Craig Espevik, Vice President of Operations at Yaskawa America, Inc. “They’re going to become more sophisticated.”

Our markets are being changed by everything from artificial intelligence to robotics, Espevik said, and marketers need to ask themselves constantly, “what can be our next value proposition?”

Learn how close coordination between marketing and value chain can give you a stronger value proposition in “How Your Supply Chain Impacts Corporate Strategy.”

About the Author

Jim Everhart
Account Planner

It's my job to help B2B brands find out who they really are.


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