Business-to-business (B2B) marketers have significant opportunities to broaden their targeting and investment of time and effort as a result of the lower costs of doing business engendered by the COVID-19 pandemic.
Rory Sutherland, Ogilvy/UK vice chair, discussed this subject during an online Responding to Today’s B2B Buying Realities conference held by the Association of National Advertisers (ANA).
“Today, it looks like you can win business over Zoom,” he said, referencing the video-conferencing service that has rapidly found a place at the heart of work-from-home business. (For more, read WARC’s in-depth report: How brands can adapt to the new economics of B2B marketing.)
In the past, B2B marketers effectively had to pay “an airfare tax, and the endless meeting-room tax, and the shaking-hands tax, and the dinner tax” as they sought to close deals.
However, with technology, and the pandemic-driven lessons of transacting business remotely, some of those costs are no longer a part of the new-business mix.
Previously, the “cost of winning a bit of business” worth £500,000 ($649,000) was a “speculative investment” of £5,000, with the assumption of having a 5% chance of winning a competitive pitch, explained Sutherland.
“Let’s say you devote six hours of your time to travel and work. Is it worth doing that for a 5% possibility of business? No,” he added.
In the new world, however, “Is it worth two hours on a Zoom call for a 5% chance of £250,000 worth of business? Yes,” he told the ANA digital audience. “We don’t need to be quite so discerning.
“Suddenly, the cost of winning new business has been reduced as well. Simply enough, lower price-per-engagement – even with a fixed new-business budget – immediately opens the door to all kinds of new pitches.”
Building on that topic, Sutherland suggested that as “the actual level of friction attached to winning new business has now become lower,” there are implications for targeting.
“When the investment required to win business is lower – when the marginal cost of speaking to 10 other people is lower – the need for hyper-targeting is, arguably, less,” he said.
“Because the sunk costs of new business have been reduced, I would argue that means we should be slightly less discriminating and less laser-focused on who we talk to.”
Sourced from WARC