B2B Buying Process

Perceptual Map (Courtesy M. Protano, Lecture 1)

Price/Perception Map (Courtesy M.Protano, Lecture 1, adapted by EB Holmes)

1. Problem recognition
2. General need description
3. Product or Service specification
4. Supplier search
5. Proposal solicitations
6. Supplier selection
7. Order-routine specifications
8. Performance review: this is a report card, a check on customer perceptions. What are customers saying? Traceable to performance provider.
9. 3 types of personal relationship managers
1. Finders: Partners generate leads, manage sales leads
2. Minders: Project Managers, manage project scope and delivery schedule
3. Grinders: Get the work done
10. Perceptual Map (Beer Example) (cost on horizontal, heavy taste-light taste on vertical)
11. Draw circles
1. diameter proportional to the revenue
2. shade customer preference area of the graph
12. Customer Expectations: important to understand, socio-culturally based 
13. When customer expectations change, their perceptions of your product changes. This affects the horizontal axis of the "customer value map"
14. Value Triangle
1. Functional: Purely product or service performance.
2. Emotional: Don't underestimate this. This is often why people choose McKinsey. (cover yourself)
3. Experiential: 
15. Customer Value Proposition: Promise of value to be delivered
1. required by IBM before visiting each customer 
16. Six ways of creating a customer value proposition
1. market: specific group of customers being targeted (IBM does for each individual customer)
2. value experience: benefits - cost (as perceived by customers) What does the market value most and what are we delivering
3. offering: product and service mix that we are selling. What gaps are there?
4. benefits: how your offering delivers clear customer value
5. alternatives and differentiation: how are you better?
6. proof in independent, objective numbers. substantiated credibility and believability of the offering
1. Ex. Cummins vs CAT, Deere, 
2. Paid UL to buy competitors products and report
17. Positioning statement
1. who are you going up against
2. what is your differentiating factor
18. 20-80 Rule: 20% of Customers generate 80% of net profit 
19. Brand Equity
20. "A Product is made in the factory but a Brand is made in the mind." (Ref. Unknown)
21. David Aaker: "A brand equity definition is a set of brand assets and liabilities linked to a brand, its name and symbolt that adds to or subtracts from the value provided by a product or service to a firm and/or to that firm's customers."
22. Josh McQueen of Leo Burnett: "Brand equity is the difference between the value of the brand to the consumer and the value of the product without that branding."
23. Tom Siebel: "100% customer satisfaction" (Siebel software bought by Oracle)