Research into the investment priorities of marketing managers in the UK revealed that marketing managers in the business to consumer (B2C) sector changed their priorities as a result of the 2008-2010 recession. From a focus on target marketing and the development of value-led propositions at the beginning of the decade, marketers turned to pricing, promotions (particularly point of sale deals) and effectively communicating the marketing proposition. Customer service and channel innovation took a back seat. And, perhaps unsurprisingly, digital was seen as the panacea for marketing managers grappling with reduced customer spending and marketing budgets. You can find more detail about this research here.
I was very interested, then, to read this paper (paid access) looking at the same problem, but for the business to business (B2B) sector in the US. The researchers – Minna Rollins, David Nickell and Justin Ennis, all at the University of West Georgia – report that most B2B companies have had their marketing budgets reduced. Furthermore, the researchers say that one of the most marked changes in terms of B2B marketing programmes has been the shift from traditional marketing to online, particularly social media.
Perhaps more surprisingly, though, according to data reported in the Rollins et al paper, B2B companies have continued to invest in Customer Relationship Management (CRM) despite the recession. In some cases, the focus was on acquiring new customers; in others, the focus was on helping their own customers navigate the very difficult times that they themselves were facing. Either way, Customer Relationship Management emerged as a key component of B2B marketing strategy during challenging economic times.
- B2C and B2B firms both face similar pressures, yet they reacted somehow differently;
- B2C marketing investment during the recession seems to be focused on initiatives that deliver return in the short-term. In turn, B2B marketing investment gives weight to long term outcomes;
- Both types of organisations have directed resources to digital in general, and social media in particular. This is not very surprising when we consider that social media offers interactivity and flexibility, offers the ability to tailor messages, and can generate rich customer insight. Still, in my view, this shows that digital is quickly becoming a hygiene factor in marketing budgets, not a differentiator.
What are your thoughts?
5 thoughts on “Impact of the economic recession on marketing – B2C vs. B2B”
Marketers venture off into social media with great anticipation for the amazing campaigns they will do, the rich insights they will be able to monitor and a worldwide audience that they can reach. Problem here is that Marketing has mainly been about pushing your message, and when your corporate message starts appearing alongside Grumpy Cat and other popular culture consumers cringe. Yes, social media is a great field to engage with consumers, but marketers have to remember with what they are competing in your news feed. Same goes for Youtube. I myself have been greatly put off by ads that insist on playing instead of my ”young japanese high schooler rocking the hell out of that guitar”. Am I in the mood for a new product? Maybe, but not when I’m relaxing and excited about the awesome channel I found on Youtube. You are right that Digital is being used as a hygiene factor in some cases. The message,the medium and the execution don’t always fit the nature of social media. Will have to elaborate on this later, when I have more time. Very interesting blog post.
Hi Mihail, Thank you for your comment (and sorry for the delay in replying!).
I suppose that we are all still learning how the use the new medium – and that includes experimenting with various models of advertising. One thing that strikes me as really interesting in your comment is this idea that this is your channel, your choice, your time… and you are greatly put off by the adverts invading that personal space. You are of course right that users’ expectations are very different in this medium, and it is not simply a matter of applying the old tricks to the new channel.
I am looking forward to hearing more from you on this topic – even if it includes a young Japanese high schooler rocking the hell out of that guitar 🙂
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