In December 2021, Plexus Holdings, a drilling technology firm based in Aberdeen, Scotland, signed a new contract. The deal, with Cameron, a supplier of wellheads, extended a license agreement for Plexus to provide special equipment that prevents gas leaks during drilling operations.
The agreement was an expansion of a series of previous deals between the two firms.
“Following our recent cooperation agreement with Cameron in relation to the supply of jack-up exploration wellheads, this latest order shows we, in addition, continue to progress our strategy of direct sales in the surface production wellhead marketplace,” Plexus CEO Ben van Bilderbeek declared.
So although the agreement is important, enabling Plexus to increase its market share and receive milestone payments on the way to delivery in the second quarter of 2022, the contract doesn’t give Plexus a new customer. It expands and deepens a relationship with a current customer.
Plexus sold more goods to a business whose executives the company already knows.
That’s often how B2B sales are made. While B2C firms invest in their websites, hire social media managers to push their brands, buy search ads and produce glossy YouTube channels, small B2B firms meet the people they already know, deepens trust, increase industry knowledge and their understanding of each other’s needs leads to future deals. One sale follows another so that the two companies grow together on a foundation of personal relationships.
But while executives at small and medium-sized B2B firms close deals over lunch and clubhouse chats, can they also benefit from digital marketing? And if they can, what kind of digital services do they need to increase their sales and boost their revenues?
Justina Setkute, a marketing lecturer at the College of Business at Technological University Dublin, and Sally Dibb of the Faculty of Business and Law at Coventry University recently conducted a study to discover what holds B2B SMEs back from implementing digital marketing techniques.
Drawing on her experience as a marketing manager at SUBC Engineering, a supplier of subsea engineers to the oil and gas industry, Setkute interviewed 16 managers from 14 different oil-and-gas contractors in Aberdeen and the local marketing companies that could help them. She asked the contractors how they currently found customers and whether they used digital marketing to grow their businesses.
What Setkute and Dibb found was that none of the oil-and-gas contractors invested significantly in digital marketing, and there were a number of reasons for their reluctance.
Generational differences played a big role. Many of the SMEs were managed by their owner, usually late middle-aged men who had been in the industry for decades and had little understanding of social media, SEO, or online advertising. They’d built their businesses at a time when phone calls could only be made in the office and contracts were faxed rather than emailed. The methods they’d used had kept them in business until now and they saw no reason to pick up new knowledge that they didn’t feel they needed. They were, one manager told the researchers, “people with that suspicion and lack of understanding, because they have gone 30 years through their career without needing to bother about social media or online PR, or anything like that, so why should they suddenly change now?”
Limited resources play a role too. Many of the companies had only a handful of staff and couldn’t afford to employ someone to maintain digital marketing efforts or pay a marketing firm to do it for them.
But the biggest reason was the way sales are currently made by oil-and-gas contractors in Aberdeen. The city functions as a cluster for the offshore drilling industry. It’s a small geographic area filled with specialists in the same way that Silicon Valley is filled with coders and hi-tech entrepreneurs, and Detroit was once filled with companies supplying the motor industry. Respondents described the environment as a “small village” in which everyone knows everyone.
“We are working with a decommissioning company,” one manager said, “and those five guys, who started two years ago, all worked at the same company three years ago, and now they are starting to work together. And then, two months ago, they set up a sister company, and the three people in the sister company, they all worked together before. And they got another joint venture with a technology company and it’s the guy that worked with them two companies ago.”
For suppliers of products as niche as rotating circuits for horizontal drilling subs and weld-quality seals for gas pipes, those kinds of connections are more important than the sharpest of social media posts. The companies aren’t going to sell to hundreds or thousands of different customers in the same way that a B2C firm will try sell to as many people as possible. A company might have a few dozen customers if they’re lucky, a number small enough to know personally everyone with the ability to make a purchase decision.
Instead of producing a stream of social media posts or creating a list of keywords to target with online ads then, the owner-managers of Aberdeen’s oil-and-gas B2C SMEs invite someone they know for a round of golf or meet them for a lunch-and-learn. Or they just phone them up. The methods might be old and traditional but the old guys who run the businesses and make the deals find that they still work. As one manager said of digital marketing:
“The problem is that so far, I have seen no benefit of it… we’ve tried Google AdWords, we’ve tried our website, these are all new formats which we have never had. The business has been going for 27 years and the old-fashioned sales techniques of phoning someone up or getting someone’s name, phoning them up, going to see them, take them out for lunch or a game of golf. The old-fashioned way still seems to work, and nothing has made me change my mind from that.”
Teaching Old Dogs New Tricks
It might seem than that the benefits that digital marketing has brought to B2C firms—the ability to reach vast audiences, build relationships, and use data to keep customers engaged and returning—aren’t relevant to niche B2C firms that can still use word-of-mouth and traditional relationship-building. Managers don’t need to pore over data and spreadsheets to glean a reason for a fall in conversions when they can just call their friend and ask him if there are any issues with the product.
Social media might be powerful but nothing is a stronger generator of business than pressing the flesh and complimenting someone’s use of a nine-iron.
That presents a problem in particular for digital marketing firms. They see the lackluster websites of companies in the area’s biggest industry. They understand how the strategies they implement have brought benefits to their B2C clients. And they want to bring those same advantages to other businesses in the B2B field that look like they’ve been left behind.
Setkute and Dibb recommend that B2B SMEs practitioners reconsider their use of digital marketing. Instead of looking for conversions, they should adopt practices that complement their traditional ways of working. Establishing a digital presence and using digital channels can support sales through building awareness but small firms need to be realistic about the results. A digital presence, the researchers argue, is unlikely to directly increase sales on its own.
“The misplaced expectations of B2B SME interviewees that new sales could be achieved directly via digital channels, seems to be a key limiting factor in digital marketing’s adoption and use in this sector. While they acknowledged that it was important to be seen to be online, none of the interviewed managers believed that digital marketing could be used to facilitate relationships with existing or potential customers, which they considered should happen offline.”
That does however leave one option for online marketing. Although the owner-managers of B2B firms saw more value in a round of holes than in a series of social media posts, they did regard LinkedIn as a tool that could assist their businesses. The site acts as a giant rolodex, enabling them to transfer their offline business methods to an online environment. Some of the managers reported using the platform to identify sales leads and understand which individual in the few companies that could become customers they needed to build a relationship with.
For B2B firms then, especially for SMEs with niche products targeting specific industries, digital marketing needs specific strategies. Rather than aim to generate sales driven by data and A/B tested copywriting, digital techniques have to support the dealmaking and relationship-building that takes place offline. Websites should show that the company is professional and trustworthy but they don’t need to do more than that. Facebook and Twitter will have little to offer but a LinkedIn strategy that enables the company’s managers to connect with other old boys in the industry club can help to keep those relationships alive even between steakhouse lunches and meetings at the clubhouse.
The result might not be the kind of massive broadening of the customer base enjoyed by B2C firms using digital marketing. But it should enable the business to deepen relationships with current customers, land word-of-mouth and produce the kind expanded agreements that keep the company growing.