4 Types Of Value Marketing That Influence B2B Buyers

As a result of shrinking margins, digital transformation, and the difficulty of differentiating one’s brand in today’s business climate, value-based marketing has become an essential part of a B2B marketer’s toolkit.

Changing social conditions are also causing prices to lose importance in purchase decisions. Data gathered by B2B International over 15 years found that price is not the main priority for 80% of B2B buyers. Marketers who seek to compete based on price alone and neglect value marketing leave most of their market vulnerable to capture by savvier promoters.

Value marketing enables B2B marketers to increase profitability by rising above the race to the bottom, showing that they understand that many of their buyers are motivated by their values as much or more than their bottom lines.

B2B Audiences are Changing

Digitalization has led to a rapid rise in audience sophistication. Modern buyers have so much information readily available that they can easily see-through campaigns based solely on low prices and hype.

Social change is also driving a powerful shift in B2B marketing. Socially aware businesses know that many consumers now demand that businesses walk the walk regarding social responsibility.

For example, in response to consumer pressure, an increasing number of companies are interacting with the planet responsibly and demanding that their B2B partners do the same. The immensely successful outdoor gear manufacturer Patagonia only allows co-branding of its products by companies who actively share its environmental values. Many other businesses are taking similar measures.

As B2B businesses adapt to these shifts, they must also grapple with quantifying and communicating the benefits their customers gain from their products and services. Without a way to clearly measure and convey value, marketing content becomes superficial and uninspiring.

Customer value management software can aid this process by tracking and quantifying ROI on value-based marketing activities, providing B2B businesses with essential data to use in marketing for renewals.

B2B Marketers can exceed buyer expectations and win loyal customers using four types of customer-centric value marketing that heavily influence buyers:

1. Economic Value
2. Functional Value
3. Social Value
4. Psychological Value

Economic Value

Businesses frequently equate dollar cost with economic value, but when marketers emphasize ROI over direct cost, the conversation shifts to value-based marketing.

Marketers can factor in how functional, social, and psychological values positively affect ROI. Astute buyers recognize the trade-off between those values and the monetary cost of the products or services. They are willing to pay more because they believe that they will ultimately earn more.

Functional Value

Functional value refers to what a product or service does, making it a natural fit for value-based marketing, which sells outcomes — products. The functional value of:

• A fleet of cars purchased by a car rental company is in the vehicles' ability to provide transportation to rental customers.
• Accounting software is in the time and work saved entering data, calculating payroll and taxes, and generating reports.
• A commercial aircraft is a balance between fuel economy, range, and the weight of passengers and freight it can carry.

Technological advances cause shifts in functional value from old models to new models with more functions. Computer and cell phone manufacturers capitalize on consumer desire to keep up with technical advances.

Social Value

Traditionally, social value has measured how much a product, service, or program enables people to interact and connect with others.

Today, a new understanding of social value has arisen which weighs what a product adds to people’s lives against its societal costs. Businesses are responding to consumer pressure by prioritizing issues such as ethical sourcing, gender equality, minority representation, living wages, work-life balance, and environmental accountability.

B2B marketers who are aware of the need for businesses to respond to these growing social trends will benefit, while those who ignore them will see their market share give way to more astute competitors.

Psychological Value

For B2B buyers, the psychological value of a product or service reflects how owning it represents their brand in the eyes of consumers.

If they are furnishing a retail outlet, their primary motivator will involve the brand experience they are striving to create. They will focus more on how brand alignment can increase their future earnings than on the cost of creating that alignment.

An online business hiring a content creation agency wants the content to reflect — and improve — its brand image in hopes that it will increase the brand’s perceived value to consumers.

Value Marketing’s Influence on Profitability

Customer acquisition costs (CAC) are growing ever higher, so customer renewals and repeat sales are critical to making a profit. Profitability depends on up-sells, cross-sells, and renewals — which themselves depend on customer satisfaction and loyalty, both of which result from good value marketing.

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