Back to Back B2B
Mplanet delivered three full hours, but stimulating hours, of B2B marketing seminars Tuesday afternoon, chaired by experts from convention sponsor the Institute for the Study of Business Markets.
Session One: Leveraging B2B Brands to Increase Growth and Profitability.
The most intriguing method that stood out to me was an "I scratch your back, you scratch mine" sort of take. A classic example mentioned of a business utilizing its brand with another business was Dolby - where the company said it wanted its brand name and logo on stereo equipment, or else its customers would have to pay more. That takes, um, a lot of gumption, but hey, Dolby Surround Sound is now a distinguished symbol to consumers, and in turn, the business clients Dolby works with now have to seek out Dolby technology so they in turn can showcase the goods to their own consumers.
You can run into a chicken and the egg sort of scenario, acknowledged one of the guest speakers, Kathy Hall from Microban. The company she works for, which specializes in antimicrobial protection in everything from humidifiers to footwear, says her company has gained awareness by 27 % since 1998. But in the beginning, when Microban awareness was minimal, the trick was showcasing to clients that the company was the undisputed leader in its field, and convincing clients that a Microban product can help distinguish a client's own product from its competitors, just as Dell and Intel worked hand in hand to stand out from the rest of the computer competition.
The second session I hit: Why Most B2B Segmentation Fails and What to Do About It. Speakers Gary Lilien from ISBM and National Analysts CEO John Berrigan stressed that when it comes to segmentation, you need to execute it right, and that in turn requires that a company stick with its plan. Berrigan used Sprint as an example - after three failed segmentation attempts, the company evaluated the process, came up with a stronger set of key components, and stuck to a two-year plan. While two years is a long time - too long for some higher-ups to accept - Sprint eventually doubled its revenue at half the cost, Berrigan said.
Also speaking at the session was Brian Berg, General Manager of Marketing for The Timken Company. What Timken did was big, bold, and controversial - so much so, that a few Timken employees who did not agree with the company's new segmentation methods left, Berg said.
In 2005, the Ohio-based company, primarily a manufacturer of steel bearings, realized that despite strong sales, the shareholders were earning less than what Timken's competitors' stockholders were making. So Timken invested a lot of time and energy determining how much money it was making - or losing - from clients. Some of them were seen as big accounts by the sales team, but Berg said that those deals were actually costing Timken too much money compared to earnings. Essentially, Timken fired some of its own high profile clients to maximize dividends.
Executing that, in addition to rebranding the company overall to capitalize on other high growth areas in need of steel, led to some stunning results. By 2008, sales at Timken were ahead of the industry instead of behind it. And the year over year EPS growth rate for third quarter 2008 versus third quarter 2007 was up an astounding 216 %, according to the company's financials on MSN Money.
Fascinating lessons, all, and more to be had at Mplanet tomorrow.
