Strategy in brief

Customers' needs in the B2B-world

B2B is an incorrect abbreviation. H2H is more correct

On 28 June 2021, Bloomberg reported that for the first time in the history of the humankind, a human was fired by a machine (or, rather, by an algorithm). It was Amazon’s driver who, as the algorithm concluded, hadn’t met his targets. The algorithm wished the driver all the best.

If you want to sell your products on Amazon, you probably won’t need to negotiate with a human being. In Amazon they have built an effective system where algorithms handle all the processes for merchants. You need to follow the instructions, and soon your products will be on Amazon’s virtual showcase shelf. But Amazon’s case is an exception so far, and dealing with less digitalized companies will involve good old human-to-human interactions.

When I lecture in business schools, and when it comes to customers’ needs topic, I am often asked the same question: “Does the word “needs” make any sense in B2B industries? Isn’t it only about the B2C world? Shouldn’t we replace the word “needs” with “requirements”?”. A direct comparison of two purchasing approaches — an ordinary person buying a smartphone or a car and a professional procurement manager ordering cold-rolled steel or chips for their plant — looks bizarre. But that’s only at first glance.

If you or your employees negotiate with a customer, and if this customer is an official representing a company, it is still a human-to-human (H2H) interaction. Your counterpart is a human being, and they can stop being one even on duty. People can’t leave their personalities outside the office’s door. On the one hand, they are financial managers, sales representatives, and top executives. On the other hand, they are women and men with fears, superstitions, dreams, and hopes. Hence, being a human inevitably influences their behavior at work.

Let’s consider two imaginable situations. In both, you will play a role of a sales representative trying to sign a contract to supply furniture to a business entity. In the first case, you will negotiate with an employee, and in the second — with a shareholder of a small firm.

Case #1 — an employee, a procurement manager.

You sit in the customer’s office and try to convince the procurement manager that your company is the best furniture supplier. What is she up to?

· She takes her duties seriously. She needs to be a reliable employee, which is a human thing.

· She is afraid of making a mistake, choosing the wrong furniture (too expensive, uncomfortable, etc.), she doesn’t want to be criticized by her boss or colleagues.

· She possibly wants to obtain a significant discount to show her employers that she’s an effective negotiator.

· You may, by chance, resemble somebody who hurt her in the past, so subconsciously she doesn’t like you, even if she doesn’t realize why.

· She may enjoy the fact that at the moment, you depend on her decision — as we all sometimes do — and takes advantage of the situation.

A roman playwright Terence, who lived more than two thousand years ago, is, among other things, an author of a famous phrase: “I am human, and nothing human is alien to me”. The procurement manager is also human, and this saying is true for her as well.

Case #2 — a shareholder

The shareholder is also a human, and nothing human is alien to him:

· He wants to save some money buying furniture to increase his company’s profit

· On the other hand, he wants to be a kind boss, and he wouldn’t like to be criticized behind his back for being greedy and making his employees sit on uncomfortable chairs.

· He is a negotiator by nature, which helped him become an entrepreneur. Hence he’s excited, and he needs to win this bargaining and make a deal on his conditions.

· At the same time, you, by chance, remind him of somebody he likes very much, so subconsciously he likes you, even if he doesn’t realize why.

So, even though a person at the other side of the desk has the crisp technical requirements while discussing a contract, they remain human, and their nature influences their behavior and biases their decisions.

Needs in the B2B world in practice

Some markets are called “highly developed”. Usually, it means that there are a lot of suppliers on the market, which means that the products they offer to the customers fairly resemble each other in terms of quality, price, service, etc. All the goods are almost the same in the eyes of the customers, which makes the task to differentiate any particular product from the competition challenging. When it comes to commodities, it becomes almost impossible.

In such situations, market players may draw their attention to what I call “soft needs”. And by that, I mean features related not to the product itself but, rather, to supplementary service. For instance:

· It may be the convenience of purchasing — mobile applications, websites, inventory management etc. It may fulfill the customers’ human needs in comfort.

· It may be predictive analytics helping your customers place their orders on time and improve their demand calculations. It reduces their risks, helps them feel confident, and shows their efficiency to their bosses.

· It may be invitations for the customers to become members of private professional societies or clubs or participate in some special events. It will make them feel they belong to a privileged minority.

In general, any ideas helping customers to do less job (by shifting the task to a supplier or service provider), reduce their risks, make their job more comfortable, help them feel special, save their time, money, or effort will be welcomed by them. After all, they are human beings, and they have the same 16 needs we discussed in the previous articles.

Would you like to know what strategic mistakes people tend to make? What is a business model? How to connect customers’ needs and P&L statement? Subscribe and read more stories. Download for free my mini-book “KPIs that will kill your business”.