Proper marketing for the industrial company
For an industrial company, the prime purpose of marketing is to attract new customers. In order to win customers, they need to complete three steps: 1) The new customer must become aware of the company, i.e. you need recognition in the target market; 2) the new customer must become interested in the company’s products and services; and 3) the new customer must trust the company – trust is a prerequisite for all customer relationships. Through these three steps, the industrial company’s marketing and sales are integrated into a single function, whose main tasks are a) to create customer relationships by offering superior value to the customer, and b) to retain the existing customer relationships and increase their value. The key concept here is the customer relationship, not marketing or sales as such. Usually, the process works as long as the industrial company’s value offering – simply put, the price-quality ratio – is clearly better than that of its competitors from the customer’s perspective.
What does an industrial company’s marketing, the new customer acquisition, actually encompass? In recent years, the biggest changes in this process have involved the utilisation of digital technology in the pursuit of recognition and interest in target markets. In our own research projects, we have analysed leading Finnish industrial companies, and we have excellent examples of efficiently reaching potential customers throughout the world with the help of digital technology. Such companies as Wärtsilä, Ruukki (SSAB), The Switch, Vaisala and Sleipner have successfully utilised digital channels in new customer acquisition. On the other hand, our research as well as surveys conducted by American consulting companies also indicate that digital technology is not going to override traditional customer acquisition methods. Instead, it is being integrated into traditional marketing methods, such as contact-building, events, trade fairs, and personal sales efforts. For example, a company can collect potential customers’ contact details and interests directly into its customer management system at a trade fair and then later approach them by e-mail, offering more information about products and services that interest them. Face-to-face meeting is still the most efficient way to make the initial customer contact, for example at fairs and other events. According to a recent survey in the U.S., events and fairs are the most efficient channel for new customer acquisition in the business-to-business sphere, whereas social media was found to be the least efficient tool for this purpose.
However, the world is changing quickly. It will be interesting to see what happens to the establishment and development of customer relations when today’s instant-messaging generation takes over leadership in industrial companies. Will digital technology replace face-to-face interaction? Will the new generations be able to establish trust through digital channels as efficiently as through traditional contacts? We already have research findings indicating that industrial customers behave like consumers in their purchasing processes. According to a research featured on Harvard Business Review, nearly 60% of business-to-business customers choose their vendor even before the first discussion. As for consumers, as many as nine out of ten apply a similar approach to buying a new car or ordering a kitchen makeover, for example.
At present, I recommend that industrial companies keep focusing on the traditional means of customer acquisition but, definitely, with the support of digital possibilities. A wise combination of traditional and digital channels is the recipe for effectiveness. So, keep on visiting fairs and arranging events!
University of Jyväskylä
Heikki Karjaluoto is a Professor of Marketing at the University of Jyväskylä, Finland. His proferssorship’s area is consumer behavior and new technologies in marketing communications. Karjaluoto is the leader of the Digital Marketing research group. His research interests include marketing communications, digital marketing, electronic business, industrial marketing and customer value.