Sometimes it’s Not about Price
It never makes a Publisher happy to hear that the choice between her media property and a competitor’s isn’t an important one for her advertisers. Increasingly that is the view of advertising buyers. The trend for years now has been to move advertising media purchasing out of its home, closely connected to the development of the creative plan, and into a separate unit or even into the department tasked with buying other “product inputs” for a company. The buyer may be buying nuts and bolts one day and then media the next.
We’ve all seen this trend reflected in the RFP process.
Customers in B2B markets are becoming increasingly sophisticated about purchasing. Recognizing that most products and services they buy are not strategic to their businesses, they begin by simply seeking suppliers that will meet their basic specifications at a competitive price. Then, after they’ve winnowed down the contenders, they often ask the finalists to offer “something more.”
I don’t agree that the RFP process has helped advertising buyers become “increasingly sophisticated” as suggested by the Harvard Business Review article quoted above. There is, however, a clear view that advertisers choices between one magazine and another or one web site and another, is “not strategic to their business.” As advertising sales managers our job is to figure out how to win in this environment.
James C. Anderson, of Northwestern’s Kellogg School of Management, and his co-authors James A. Narus, and Marc Wouters, after researching this selling environment, concluded in their article Tie-Breaker Selling, that sellers often misinterpret what will best win the business.
In the world of media buying and selling; buyers routinely ask for some “value added” or “creative idea” in addition to hitting the mark on price or CPM.
The research discovered that “many suppliers misunderstand this request. They’ll respond with the well-worn tactic of stressing features their offerings have but competitors’ lack, and when that doesn’t work, they propose price concessions. But it turns out that customers are looking for neither of those things.”
The authors reported “we discovered that when purchasing managers ask for something more, they are actually looking for what we call the justifier: an element of an offering that would make a noteworthy difference to their company’s business.”
Too often media companies feel pressed to add in free pages or free digital impressions when that is really not different from lowering the price. Media companies would be far more successful with breaking those ties, assuming they have their media priced appropriately, by offering research.
Media companies generally under-invest in research. As publishers of content in their sector they must be experts in how their readers think and what they care about. But most media companies simply rely on their editors to just “get it.” Yet in every sector people’s interests and habits are changing fast. Marketers of products have just as much difficulty as you in keeping up with the new ways their customers are learning about products and shopping for them. An investment in research will pay off by answering these questions, and by offering a way to piggy-back advertisers questions on a survey.
Research that provides value for advertisers trying to keep tabs on their changing market can be big or small, complex or simple. Either way the ability to include a custom question in your research may be just the Tie-Breaker you need.