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Customer profiling in B2B

17th May 2007
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By Rob Lewis, staff writer

When the customer is a single person, a little analytics can reveal their tastes, habits, lifestyle… everything you might want to know about their purchase cycle. Profiling businesses, however, is a far more difficult matter, considering selling to the average company involves convincing an ever-changing line-up of between 5-10 people.

Data analysts Alterian investigated the development of B2B analytics in its Think Tank survey last September. No wonder it concluded that it remained the greatest challenge in B2B marketing.

“It’s definitely in its early stages,” says Bob Humphreys, former business development manager at BT Radianz. “To give you a typical example, if you take some of the larger vendors that provide some of the monthly license fee type services, it’s very much a pure numbers game. You get the market data, but what you tend to find is that nobody really has the opportunity to go back and find out why they lost the client, or why the client didn’t choose them in the first place. Personally speaking, I think there’s a tremendous need for it in the marketplace.”

BT Radianz used customer retention specialists Clientmind in its wholesale finance area to help develop its customer profiles. “They helped us put a brand new proposition together for medium to small fund management companies, and establish some true needs and requirements,” adds Humphreys.

Every supplier should know their customers, but the B2B company absolutely has to, he argues. “You need to know their needs, you need to know who the players are. B2B relationships do tend to be more lucrative, but you need to invest more time. It makes it more important to know what you’re doing, and that’s why customer profiling is important. Otherwise you’re wasting that time.”

"B2B relationships do tend to be more lucrative, but you need to invest more time. It makes it more important to know what you’re doing, and that’s why customer profiling is important." Bob Humphreys, BT Radianz

It’s also an important part of profitability. B2B companies frequently take on huge contracts with major customers that bring in large amounts of revenue, but far less impressive margins. While your finance director would be able to tell you this from the quarterly figures, if the business had profiled its customers’ needs and projected needs correctly these situations would never have arisen in the first place, and Humphreys says there are countless examples of this.

“I know of one particular vendor who did a lot of outsourcing work, and they won a very large outsourcing deal in Europe, but it was a one-off project,” he comments. “So the cost base was quite high and the margins were very low. Because they won the project, they decided to turn it into a service and offer it to everybody, but the thing didn’t sell. When they finally got round to some customer profiling, it became clear that what they were supplying as outsource providers was already a core proposition to their customers’ businesses.”

However, while customer profiling is integral to the B2B environment, Humphreys suggests firms should be wary of taking it too far. It should never replace traditional face-to-face sales and customer skills, for example. “If you’re not careful it can actually overtake you as an organisation. You find that your sales people and your account managers become Siebel jockeys, although if you’re selling an internet-based product you can probably get away with it.”

Profiling online

Neil McManus is commercial director at GHM Communications, a business telecoms provider based in Oxfordshire. Its client analytics is entirely internet-based, but its hasn’t forgotten the value of the personal touch. “We use an online CRM solution that enables us to vertically map each individual customer to their specific industry sector, and we use it to put out targeted pushes in that area, to potential and existing customers,” he says.

Tailored communications allow GHM to supply information that it is relevant, pertinent, and more importantly, read. But that’s not all. “Within two or three hours of a newsletter being e-mailed out, I can see who’s read it, who’s forwarded it, and who on top of that has actually visited the site and what links they’ve clicked on afterwards.”

An additional benefit of an online profiling system is that it’s accessible anywhere that has an internet connection, which is especially useful for sales people and marketers who spend a lot of time on the road. McManus’ experiences in B2B analytics conform to the model laid out by Jim Sterne, president of the Web Analytics Association, who has argued that the internet would always be where business customer profiling would develop a real edge over its more prevalent consumer incarnation.

In an interview last year with e-consultancy, he was quoted as saying that B2B companies have a much deeper relationship with their customers – so whereas B2C’s generally just tended to note how many pageviews a particular product received, B2B’s can create fuller, planned responses. For example, if visitors from a certain company are looking at the specifications and the service polices, but not the ROI or the financing, then clearly the message hasn’t got out to the accounting aspect of the buying committee.

B2B companies have a much deeper relationship with their customers – so whereas B2Cs generally just tend to note how many pageviews a particular product received, B2Bs can create fuller, planned responses.

McManus agrees. “Before we even speak to a customer we know whether they’ve gone to the site, what they’ve looked at, understood exactly what we do, and from there on they’re a much warmer prospect. We can also communicate any new developments or new products that might be of interest to them, and it keeps the conversation going.”

Yet proper BRB analytics can take customer relations to an even deeper level. For some client companies, the profiler will know more about certain aspects of their business than they do. While this could be considered intrusive in the world of consumer profiling, in the business world shared knowledge is always welcome. GHM regularly share their findings with grateful customers.

“Large construction companies find it very difficult to understand who’s got what phone, and even where their phones are, because they’re changing all the time,” McManus explains. “At GHM we can share out analytics with them so they know who’s spent what and where.”

GHM first began customer profiling when it signed up to participate in the pilots of the In Touch Solution offered by Customers Really Matter last September. McManus says sales this year have gone up 60 percent. “Not solely through the solution,” he adds, “but it has been a helping hand along the way.” Proof indeed that rising to the greatest challenge in B2B marketing can pay off.

Read more features, practical case studies and white papers about B2B client relationships.

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