Don't Forget B2B CRM

B2B relationships are certainly different than B2C ones. Relations with consumers are more likely to take an emotional tone, for better or for worse. Businesses, on the other hand, make purchasing decisions solely for the purpose of making or saving money -- it's nothing personal, it's strictly business. The two types of relationships both need CRM, it just needs to be applied differently.

While we're on the subject of the customer relationship, it's important, even vital, that we do a better job of teasing apart customer types. It seems to me that the vast conversation about social CRM and the social customer has focused on the end consumer -- the business-to-consumer (B2C) relationship -- not the business-to-business (B2B) one. That's probably a smart over-reaction to the fact the about two-thirds of the economy consists of B2C transactions.

What might not be smart is assuming that the other third of the economy operates more or less like the consumer economy and that B2B customers are the same and can be addressed with the same tools and methods. The most popular business organization model is still some form of hierarchy, and businesses often make decisions based on the consensus of people up the ladder. Other people have input in the decision, but very often, final approval comes from people higher up who have budget responsibilities.
Businesses spend money for only two reasons: to make money or to save it. If a purchase, and the ongoing cost of repair, maintenance and upgrade, cannot be justified on these grounds, or if the purchase cannot flat-out make more money than it costs, there is no reason for it. This reality puts a box around most B2B relationships, which prevents them from becoming emotional in a B2C sense. It also lets a business relationship operate more along operational lines where objective measures like price, on-time performance and quality standards dictate the health of the relationship.

What's the Dif?
Over the years, vendors have had varying degrees of difficulty dealing with the differences, since they are often in B2B relationships with suppliers as well as B2C relationships with consumers.
There's more room for bruised egos in a business-to-consumer (B2C) relationship than in a B2B one. A consumer can take offense at a vendor's behavior, while in a similar B2B situation a behavior might be shrugged of as "just doing business."
With all that said, it ought to be easier to produce B2B CRM systems focused on operational standards, yet deployment of good operational CRM systems seems to lag right now. Exceptions show up in customer service in companies like RightNow (kudos for the Magic Quadrant), Salesforce and others dedicated to building knowledge bases that are accessible and searchable from multiple channels.
In the best examples of B2B service, vendors are using social technologies to capture customer needs and collective solutions and then make them useful and available to others. This neat trick enables vendors to actually capture intellectual property (IP) from normal conversations. The IP is recycled through the cloud support infrastructure, resulting in lower service costs and, presumably, customers that are happier because their issues are quickly resolved.
Salesforce, with its Sales Cloud, also applies social ideas to B2B selling with positive results. Here the company gathers social IP from all sales encounters and distills common ideas from numerous encounters that can be applied in the future.

Do the Evolution

What's most interesting to me is the evolving realization that social ideas apply equally well to both kinds of relationships but in opposite directions. The B2C approach is to socialize the relationship with the customer by gathering data from the market and analyzing it for common trends. Understanding customer trends enables B2C vendors to extract information they can apply in future encounters. Sales Playbooks, a term popularized by Kadient and some others, are the distillation of customer reactions to vendor sales initiatives and materials. From a playbook a vendor can plot a sales strategy with confidence of being on the right track.
In comparison, B2B vendors are beginning to socialize the organizational, e.g. operational, response to the customer. Chatter, another Salesforce invention, socializes the vendor organization. In a B2B situation, a vendor organization knows that operational excellence is critical to most relationships. Socializing the customer relationship from within the vendor organization simply provides the necessary and immediate stimuli for personnel to take appropriate actions.
That may sound like a mouthful, and it is, but the net of all this is an easier take-away. The B2C and B2B relationships are fundamentally different and lately, we've given a lot of attention to the former and maybe not enough to the latter. The social approaches to each are diametrical opposites but once we get our heads around that essential idea, I think we'll be more successful in the B2B world.
Finally, who drives the relationship -- B2C or B2B? I think it's a smart vendor who enables the customer to believe he or she is in the driver's seat.

When B2C and B2B Worlds Collide

In 2012, companies will need to transition their interactions with customers from a handshake to a conversation to follow the changing expectations of society. In order to do this, companies will utilize real-time commerce technologies to reach not just the customer, but the end user as well.

Having spent more than 20 years in the tech industry, I've seen many trends (and related buzzwords) come and go. One trend that I continue to see each year is the "consumerization of IT." While it hasn't always been referred to by that label, consumer demand has manifest itself across a variety of sectors in the industry, from PCs and email to the cloud . Today, an obvious example of this is the desire to connect personal smartphones and tablets to a secured business network.

As this trend continues to make its way to the cloud, we're starting to see consumerization shift the way businesses interact with each other and their customers. Customers are exhibiting behavior much like employees and are leveraging consumerization of technology to find new ways to interact, obtain information, and get connected with external entities such as vendors, service providers, applications and more.
Evolving expectations around real-time visibility throughout the value chain and pressure to achieve lower TCO by deploying cloud-based business solutions will be big themes this year. This type of multi-enterprise collaboration and connecting with customers and partners, coupled with the "power of now" mentality will be pervasive.
Keeping these disruptive shifts in mind, here's what I believe is in store as 2012 unfolds:


1. Enterprise Resource Planning systems (ERPs) will focus on delivering integration networks targeting vertical industries.
In their ongoing effort to improve collaboration and process automation, both on-premises and cloud-based ERP and CRM vendors will look to the cloud to build their network communities as a way to extend their end-to-end business processes, as well as deliver incremental value to customers.
In 2012, we will see vertical industry networks increase adoption and drive tighter collaboration across participants, particularly in the areas of e-commerce and process visibility. The power of the network and the community will continue to accelerate exponentially as the number of network participants increases.
2. Global economic uncertainty will prevail and drive companies to get even closer to existing customers.
With economic uncertainty extending into next year and a major U.S. presidential election on the horizon, companies will focus on maximizing their relationships with existing customers and partners as a significant contributor to top line financial performance.
We will see greater focus on solving customer needs, adapting solutions to fit their requirements, and providing new ways to deliver value without forcing them to change the way they currently do business. Companies are flagging these areas of opportunity by finding ways to leverage existing customer infrastructures with minimal incremental investments.
3. Consumerization of IT drives real-time end user visibility tools.
With the rise of social networks, expectations for how we connect and communicate have evolved. People are accustomed to constant communication in both their personal and professional lives and will often modify old ERP systems with user-friendly tablet and phone applications.
In 2012, companies will need to transition their interactions with customers from a handshake to a conversation to follow the changing expectations of society. In order to do this, companies will utilize real-time commerce technologies to reach not just the customer, but the end user as well.
4. Cloud Total Cost of Ownership (TCO) will remain compelling: Companies will continue to adopt cloud-based solutions primarily to reduce overall IT costs.
In the new year, TCO will continue to be the primary driver of cloud adoption due to scalable costs and consumption models offered by cloud vendors that simply cannot be matched by on-premises solutions.
A close second driver of adoption will be the need to drive costs out of critical business processes through automation and integration throughout the extended enterprise.
5. Enterprises will gain confidence in the cloud and migrate on-premises apps to the cloud.
As cloud computing continues to evolve and security standards are established during the year, enterprises will see the cloud as a viable option to run business-critical systems.
As large and mid-size organizations face significant upgrades with on-premises ERP applications and carefully assess business value vs. upgrade costs, they will find compelling justification to move more holistically to the cloud.

CRM: difference of B2B vs. B2C model

All CRM systems are not created equal, and that's good news for companies that sell more to consumers than to businesses. However, it's crucial to understand the differences between B2B and B2C CRM in light of each company's individual requirements. Three consistent themes appear and can be used as a baseline for selecting tools to help B2C marketers: speed, process and persistence.

CRM solutions have a long history of helping B2B marketers achieve greater ROI from their leads. Yet for companies that sell their products and services direct to consumers, CRM solutions frequently miss the mark. A quick Google (Nasdaq: GOOG) search for CRM helps prove this: The search returns plenty of B2B products, but sifting through the results to find solutions designed specifically for the B2C sale is like finding a needle in a haystack.

Why is this? To answer that question, it's first necessary to understand the unique differences between B2B and B2C sales. Of course, there are many formulas for sales and marketing success, but seven aspects that are common to both B2C and B2B sales effectively illustrate the differences between them:

1. Speed of Sales Process -- A B2C sale is typically fast, usually weeks or months; a B2B sale is much slower, usually months or years.
2. Number of Decision Makers -- There are usually one or two decision makers in a B2C sale; there may be a dozen or more involved in a B2B sale.
3. Simplicity of Buying Process -- A B2C sale is relatively simple; a B2B sale is usually more complex.
4. Quantity of Leads -- A B2C sale starts with more leads; a B2B sale will have fewer leads to manage.
5. Role of Emotion -- B2C sales frequently involve emotion on the consumers' side; a B2B sale is typically driven by a business decision rather than by emotion.
6. Value of Sale -- The total value of a B2C sale is relatively small -- hundreds or thousands of dollars; a B2B sale could be thousands or even millions of dollars.
7. Uniformity of Offer -- B2C sales are typically a uniform product offering; B2B tend to be a more customized product offering.

It is clear that there is a distinct difference between B2C and B2B sales. So doesn't it make sense that sales and marketing professionals should leverage tools that are designed to address the unique aspects of each sale? To make matters worse, there is much confusion about the definition of CRM that frequently leads B2C marketers to implement solutions that either don't work or are overkill.

 What 'CRM' Means

CRM is typically defined as a solution used to aid a company in the management of customers and sales prospects. That means that CRM can be a useful tool for a variety of business functions, from lead generation to customer service.
For companies that are specifically looking for ways to track and convert more leads, a CRM solution may be overkill. Moreover, CRM systems fundamentally are designed with a hierarchical structure that is not required for B2C companies. Consider this example:
Company A is a B2B business selling copiers to other businesses. Company A uses CRM to track its prospects and clients at a variety of stages of the client lifecycle. First, Company A is already selling copiers to a certain division of one client. It is also trying to win a contract from an entirely different division of the same company. Having a CRM system is quite useful here because the client is stored as a "company" record, and each person in the company is tied to that record as a "contact." A "company" can have many "contacts," creating a hierarchical structure.
Company B is a B2C insurance company that sells auto insurance policies to individuals or families. Company B uses the same CRM software as Company A, but is burdened by the significant overhead required to manage the hierarchical structure. Company B simply has a single record for each customer looking to get an insurance policy. Having the added capabilities of a CRM system is not useful and creates unnecessary steps in managing its leads.
Referencing the seven sales and marketing rules above as they relate to the B2C sale, three consistent themes appear and can be used as a baseline for selecting tools to help B2C marketers:

1. Speed -- At every stage, speed is essential when dealing with a B2C sale. Leads must be received in real-time and distributed to sales people quickly; initial contact must be made in minutes.
2. Process -- Having a consistent and repeatable process is critical to scale a B2C sales operation; that means everyone works leads the same way, so sales managers and marketing executives can track results.
3. Persistence -- Selling to consumers is very competitive. To be successful, B2C companies will need to have persistent long term follow-up strategies in place.

Speed Matters

The first key driver is speed. There has been much research about the importance of speed in the sales process and, in particular, speed-to-contact. A recent MIT study found that leads contacted in five minutes convert 22x more often than after 30 minutes. When evaluating tools to support B2C sales, look for solutions that offer

1. real-time lead source integrations;
2. automatic rules-based lead distribution;
3. lead management and pipeline reports;
4. email and screen pop notifications; and
5. key performance metrics tracking.

Process for Conversion

The second key driver is process. Although many marketers believe lead quality is the silver bullet for success, sales process also plays an important factor in converting leads. Long-term consistent follow-up can have a dramatic impact on overall conversion rates. B2C companies should look for solutions that offer the following capabilities to optimize the sales process:

1. easily configurable sales workflow;
2. custom lead form and call dispositions;
3. automatic lead nurturing;
4. milestones tracking; and
5. scheduled reports and email delivery.

Practice Persistence

The third key driver for B2C sales and marketing effectiveness is persistence. Multiple call attempts greatly increase the likelihood that leads will be contacted; the optimal number to maximize contact rates is as many as six calls. That means it is very important to be persistent. With persistence being a key driver for success, it's easy to see how important it is for B2C companies to have tools that support this behavior to maximize return on their marketing spend. The most successful B2C organizations leverage tools that incorporate these features:

1. lead scoring and ranking;
2. automatic call prioritization;
3. follow-up drip emails and reminders;
4. lead recycling and routing; and
5. follow-up reminders and emails.

There is clearly some overlap between what is useful for B2C and B2B marketers. For companies that borderline the characteristics of one or the other, traditional CRM may be a good fit. However, for B2C organizations that closely align with the attributes described here, there is more than enough evidence to support the need for specialized B2C tools.
The good news is they do exist. In particular, specialized B2C solutions are available in some verticals like mortgage, insurance and education. Furthermore, as more B2C companies begin to demand solutions that are specifically designed to support their unique business processes, better products will become available.
For now, start by doing research; understand what type of company you are and then look for tools that support your business processes. Ask the right questions to find tools that work for you.