Thursday, April 7, 2016

Urgency in B2B Marketing

I previously meditated on the potential and problems or urgency in consumer marketing: the way in which a customer can be motivated to make a purchase now rather than later, and the way in which these tactics have been so thoroughly abused that attempts to create urgency are met with cynicism rather than compliance.    I’ve since been asked whether the same tactics (and problems) are applicable in B2B marketing or even in promoting an idea within a company.  My sense is that they are.

Organizations are notably slow and stodgy, designed to maintain current operations and resist change – whether that change is buying a new product, switching to a different vendor, or taking action on an internal proposal.   This is quite often by design: the organization realizes that rash decisions are often bad decisions, and places procedures and committees in the way of any change – such that even good changes require a great deal of effort to gain consent and adoption.  An organization is even more guarded and conservative than an individual, which makes the user of fear tactics much more difficult.

Just as with customers, organizations rank proposals according to the hierarchy of needs: anything that threatens the status quo is dealt with first, anything that presents an opportunity to improve the status quo is second.   A competitive threat to their existing market base is prioritized over the opportunity to expand into new markets – even if the second is more profitable than the first and the firm would be better off making the change.

The second criterion of prioritization has to do with the degree of impact, which is generally monetized into a ROI or ROE calculation.   Things that have the potential to have a high cost or generate a lot of profit, relative to the investment required to act, are given higher priority than things with a lower cost or profit potential. Ideally, this would be done without regard to whether the proposal represents a threat or an opportunity – but again, threats are seen as more pressing because they speak to psychological needs that are much closer to the base of Maslow’s hierarchy: hence maintaining business as usual is valued more than innovation.

The third criterion of prioritization is proximity to the present time.   If the amount of profit or loss is the same among two or more opportunities, the one that can be acted upon more quickly (or needs to be acted upon more quickly) takes priority.  This is in the same way that a young employee prioritizes paying off student loans over paying for retirement – he feels he has decades to deal with the second, and the first impacts his everyday lifestyle in the present.   Net present value can help neutralize the proximity effect, but things are not always done in a sensible manner.


Thus considered, an organization faces the same fears and applies the same criteria as any individual does – but it is most often done in a slower and more deliberate manner to avoid making a rash decision.   And while this seems entirely sensible, it often means that time-sensitive opportunities are lost by firms that move slowly to prevent the kind of mistakes that are made by acting in a panic.

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