B2B transactions are more complicated than consumer transactions. More people are involved in the decisions, more education is needed to understand the risks and benefits, and more organizational changes are required to complete the implementation. These criteria make it harder for buyers and sellers to complete a transaction. They raise the costs for both parties. Sellers have to spend more to acquire customers. Buyers must spend more time and energy evaluating potential purchases.
Market makers provide liquidity
At the opposite end of the transaction spectrum are the market makers at stock and commodity exchanges. Market makers provide liquidity to a market. They do this by quoting both a buy and a sell price for a financial instrument that they hold in inventory.
The financial asset being traded might be complex (e.g. partial ownership of a large company like IBM in the form of company stock). But the assets are well-understood, so they trade frequently and in high volumes with no negotiation needed between buyer and seller.
The market makers for these financial assets serve a ready group of buyers and sellers who understand what they are trading, who know the risk, and who agree on the price.
Since none of these criteria are true in most B2B markets, both buyers and sellers in B2B markets must spend a lot of time negotiating over the terms of a transaction.
Use the buyer’s journey to break the negotiated product into smaller pieces
But what if the buyers and sellers in B2B markets could break the transaction down into smaller parts in which the friction of each of the small transactions would be reduced?
Many B2B sellers already do this when they study the stages in the buyer’s journey and work with buyers to take many small steps toward becoming a customer.
The sales and marketing organization in these companies acts as a market maker for the inventory of information and tools that are used to help buyers move along in their journey. The selling company provides the information and tools; the buyers “purchase” them with their time and attention.
The more the selling company can break the process down into many transactions, the more they can reduce the overall friction of forming a business relationship with the buyer.
Reduce the cost of negotiated markets
Becoming a market maker for inventory of information and tools works best in the earlier phases of the buyer’s journey. In fact, inbound marketing serves this exact purpose. It creates an inventory of useful products that attract buyers and help them move along in their journey.
However, at some point in the buyer’s journey it’s likely that the combination of price, risk, and the specific needs of the buyer will require negotiation between seller and buyer. That’s where sales people play their vital role. With the buyer, they work through questions about implementation, financial justifications, training and guarantees.
The more you can be a market maker for many incremental markets along the buyer’s journey, the more you can reduce transaction friction and lower the cost of customer acquisition.