How do businesses stand out from the crowd and entice new customers? Can B2B companies benefit from content marketing?
Let’s begin by defining the B2B market context and what content marketing is as a business tool.
Content Marketing’s History & Significance
Content marketing is any information published by a company and consumed by an audience.
Newspapers and tabloids are the original content marketers. A newspaper brand publishes articles and often dictates the rigor and type of information distributed, while consumers choose which paper they read based on their values.
Historically, B2B & B2C brands had few choices for ongoing customer communication: newspaper Op-Eds (public relations), traditional advertising, snail mail ads & marketing, and traditional brand equity plays like sponsorship. These marketing avenues were expensive and opaque: it was not easy to track their effectiveness. Only big, deep-pocketed brands could communicate consistently with their customers because of the limited supply and lack of transparency.
Fast forward to the internet, specifically Web 2.0, and our marketing universe turned upside down. The internet reached maturity, and as a result, a rapid onset of innovation was triggered. In business strategy, this type of maturity is called a decoupling point; a moment when a market transitions from favoring integrated companies (like giant media companies) to modularity or specialization.
In practical terms, the internet’s open-source architecture and rocketing commercial adoption rate meant it had become a viable and universal resource. With internet-ready computers in every home and business in wealthy countries, Entrepreneurs had a new means to connect businesses and consumers.
The Social Web & Content Marketing
The most significant development of Web 2.0 was the launch of “the social web.” Earlybearers, Facebook and MySpace, took advantage of the new era, launching environments that allowed individuals to connect and engage. Apple launched iTunes and the App Store for the iPhone. Google pounced on an opportunity to steal a communication environment from America Online by offering free email in Gmail.
The new digital world encouraged co-creation with developers and enabled multi-product integrations. Soon, tasks that once required lots of money and lots of time were available at the click of a button.
A few key products and categories accelerated the pace of business marketing, namely – email marketing (ex. Mailchimp, Constant Contact), digital advertising (Google Adwords, Facebook & LinkedIn Ads), and content marketing (blogs & organic social) and search.
Within a few years, small businesses with limited means to speak directly and consistently to their customers now had a simple infrastructure with which to communicate. Direct access to customers would change everything, and it began a new type of competition that gave birth to the modern lens of content marketing.
How do companies build new business?
Brands only have so many ways to develop leads, no matter if they are B2B or B2C. Below is the macro context of the business development marketplace.
- Search (inbound)
- Brand Awareness (inbound)
Search is part of our everyday lives. We wake up in the morning, pour some coffee, and open Google to search “morning mantras,” “midweek dinner recipes,” or “what’s going on… besides COVID;” Questions like these and countless others are submitted to search engines hoping they return valuable answers.
As the world is increasingly more digitally native, younger generations turn first to the internet for answers. When users search for your product, understandably, you want to be first in line to answer their questions. It does not matter if you sell shoes to end-consumers (B2C) or provide industrial machine repair services (B2B).
Search allows your business to compete via two pull marketing and inbound techniques: SEO and content marketing.
Advertising, in concept, is well-understood. Fundamentally, nothing has changed since the 16th century.
It is a pay-to-play communication model; historically, the options were limited and opaque; now, the options are more numerous and transparent (although Facebook, Amazon, and Google control the marketplace).
Digital advertising has seen widespread adoption because it is relatively inexpensive, somewhat intuitive, and allows you to track ROI. However, there is often a lack of understanding regarding acquisition cost. Specifically, how much a brand will ultimately spend to achieve and maintain a customer over time (i.e., customer lifetime value.)
Advertising content consists of stories and information about your business’s goods and services. For instance, say you want to promote the B2B service mentioned above, “industrial machine repair service.” You may decide to show individuals seeking this information a video demonstrating your expertise and unique product offering. Or, perhaps you want to market directly to companies that deploy industrial machines and have them read your blog to extoll your sparkling reputation and 40 years of expert service.
The content you promote is the foundation that gives life to new leads.
Unlike Search and Advertising, brand awareness is more imprecise. It includes any activities used to promote the brand’s awareness and stickiness. In addition to the above, this includes partnerships, endorsements, PR, activations, word of mouth/gorilla marketing activities, and more.
Brand awareness is most significant to your success in markets where your company competes against well-known products and services. For example, imagine your startup B2B company sells accounting software targeted at the wine industry. You would have a difficult journey ahead with a market saturated with products like Quickbooks.
Brand equity is measured by share-of-voice research and what we call market propensity research which helps businesses understand the basis of competition for your product.
Referral marketing is a powerful means to provide social proof for your product or service. It comes in a few flavors: digital and analog.
Analog referral is when customers endorse your product or services to their network. This can be powerful for any business, but it is particularly beneficial to higher-end products where consumers seek to justify their spending with a trusted resource.
Digital referrals are when one website references another website as a resource. For example, many publications produce a Holiday Shopping Guide every year, linking to many of their favorite products or gizmos. These guides drive significant downstream traffic to each company, often selling out the product. Digital referrals are frequently the result of public relations.
Referrals are beneficial to B2B or B2C. In addition to increasing awareness, every time your business is linked to online by a reputable business (this is called a backlink), it improves your domain authority and organic SEO.
The marketing pathways illustrated above demonstrate the finite and definable ways to create new customers. However, new customer acquisition is only one-third of channeling activities toward increased revenues.
In addition to developing new customers (C), businesses can expand revenues by increasing the frequency (F) of purchases and by increasing the average order value (AOV) purchase size. So, with some pretty simple math, we can produce a useful growth (G) formula:
But why? Why not just double your customers to double your revenue? The key factor is that every new customer has a cost of acquisition. That coupled with the fact that the price of advertising platforms increases year-over-year in tandem with year-over-year inflation, we have a scenario of diminishing year-over-year profit. This scenario is brutal if the basis of competition in your industry is price.
So instead, we look to a balanced marketing mix that focuses on three principles:
- Building new customers
- Increasing the frequency of their purchases
- Increasing their average order value.
Here is the hidden benefit:
F & AOV increase customer lifetime value without acquisition cost.
Hang tight; we’re circling back to our original question!
So, does content marketing work for B2B?
First, how do we increase F & AOV? I’m sure you know the punchline.
That’s right, content marketing. Let’s start with frequency.
For a current customer to increase purchase frequency, they need to be aware of additional products or services your company provides and their benefits.
With Web 2.0 vehicles for customer communication, i.e., email marketing platforms, social media, or industry-specific communication platforms, we can distribute the information about your company’s products & services at little cost. In fact, we can communicate with clients frequently and concern ourselves with how do we bring value to customers across the calendar year. This line of thinking helps tune your team to consider customer needs to mature the product offering.
To increase the average order value, you can indeed raise prices, but that is a separate article about the elasticity of your pricing model and the basis of market competition. Instead, we will focus on the ability of content marketing to attract customers through the cross-selling of your current product and service line.
The critical factor in increasing average order value is the timing of cross-selling.
A classic example is the success e-commerce has serving up recommended products to add to your purchase without re-entering the checkout process. Success is multiplied by linking an upsell to a core product’s value (“consumers who purchased this also liked this”), increasing the perceived benefit of the product the customer has already decided to buy.
Similar to the benefit expressed in our frequency example, focusing on how to increase average order size tunes your team to incremental innovation opportunities.
You could achieve this by:
- Developing new, adjacent products and services
- Sustaining innovations that improve your product (and allow you to increase profit margins)
Price & Time: Content Marketing for B2B v B2C
Content marketing is agnostic to business types (B2B or B2C) and is a powerful communication tool. Its impact is tied closely to the cost of products and services. The higher the price or the more complex the product/service, the more indirect and abstract the impact.
Let’s unpack that last bit by starting with a B2C product, luxury automobiles.
For decades, luxury and sports cars have avoided mass marketing communications, namely traditional advertising, because the medium is too broad and their consumer set narrow. Instead, they have succeeded in focusing on mediums purpose-built for their customer type, such as financial magazines and promotional events targeted to the enfranchised. Now, via social media, these brands can speak directly and regularly to their fans through content marketing.
In this way, content marketing for highly-priced and complex products and services is brand awareness marketing that should be focused on incremental product education, otherwise known as brand equity. This model is consistent across product markets where the basis of competition is differentiation. In addition to luxury cars (B2C) it can be seen in bespoke professional services (B2B, like us here at BS LLC) or insurance (B2B / B2C).
Content marketing works differently for lower-priced products and services with low psychological purchase barriers. Here, if the product meets a true human need, you will find a more transparent conversion value and a more immediate commercial value. Namely, the timeline for product or service acquisition is shorter.
For example, you see a piece of content on Instagram that helps you imagine how that product could fit neatly in your life. Click, and it’s on your counter in three days. It could be a beauty product that costs $5, or maybe it’s your favorite item at a local restaurant, or maybe a concert or event. These examples rely on split-second emotional decisions.
For B2B, time events are also crucial. Once you understand your customers’ Jobs To Be Done and their purchase timeline, you can find points on their purchase journey where content can facilitate increased frequency of purchase.
Let’s take the example of an engineered discreet part. After talking with the purchasing departments at multiple customers, you find out that their financial year ends early. They are mostly concerned with low turnover of suppliers in order to cut down on internal costs. In the service of getting prepared for the next year, they need to present budgets and plans to their executive team on how to meet objectives.
Poof, you have a marketing insight that enables your team to produce content to help improve your chances of a win. Also, you found out that purchasers have lots of headaches with suppliers because parts break, which pushes them over expected budgets and forces them to change suppliers every year in search of support that works. They audit the factory floor in March, which usually causes a storm for purchasing!
Now you know when to send your sales team to sell a maintenance program that ensures your products work and keeps the purchasing team happy.
The examples are oversimplified, but the context is consistent. Content marketing is useful across industry types. Its conversion is faster with lower-priced items and equity-based with higher-priced items. Content marketing’s success rate is pinned to understanding your customer journey and when to deploy content based on their needs.
This article does not recommend that everyone spend all of their time drumming up posts for social media. On the other hand, we hope it dispels the idea that content marketing is not useful for B2B. Finally, we hope it paints a picture that content marketing, like all marketing, is only successful with focus and precision.
Content marketing can help drive customer frequency and average order value, cutting down on customer acquisition cost and increasing customer lifetime value. However, it too has a cost. You must put in the due diligence to create a strategy that understands customers’ needs; you have to build a content schedule and stick to it; you have to design and write copy, measure the impact, adjust, rinse and repeat.
Getting smart about content marketing is essential to every business’s future. The digital conversion of business has passed, and its future is managed and executed in a digital realm. If you don’t figure out how to use content to improve your success, you can be sure that your competitors will.
Estimated reading time: 11 minutes