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The B2B Cluster Framework
One of the most challenging aspects of undertaking a new commercial strategy is also its biggest reward: market differentiation. The goal of a fresh go-to-market (GTM) strategy is frequently to capture more market share or volume, or perhaps hit several targets at once, but it’s also an opportunity to gain new perspective on who your clients are, what they need—and how you can win them.
For B2B companies, this represents a vast field of products, services and business models that place dramatically different needs on each GTM. Yet many companies look to their competitors, the market or even to past B2B GTMs to address the here and now. In our experience, this typically produces muted results as well as misses the potential for differentiation within a competitive landscape.
From this perspective, we believe the key to building a successful B2B GTM is about knowing what your business and offerings mean to your customers. Similarly, the tools and actions that matter most in your context should connect directly to the demands you’re facing.
By leveraging our cross-functional approach to consulting—by competence rather than industry—we have analyzed more than 50 industries and sectors* to distill prominent drivers of market and commercial dynamics across a broad scope of B2B companies. The result is our B2B Cluster Framework, a matrix that divides B2B companies into six core groups and identifies the most important actions and tools for accelerating the results of the GTM within each.
For example, if your offering is highly interdependent on your customers’ profitability and differentiation, and your clients are experts in your product or service, innovation and technical skills will be key to meeting the constant demand of turnover in the market. In other words, your B2B Cluster is “Innovation Obsession”—which includes several manufacturing sectors as well as information and technology services (and plenty more ideas for your next GTM design).
Need to brush up on classic GTM tools? Access our complete guide to B2B commercial transformation and development—the Strategy-to-Execution Toolbox—here.
While exceptions within internal business units may occur, the B2B Cluster Framework is based on consolidating the variables that make the deepest impact on the majority of industries and sectors included below. Variables that affect only a few sectors or industries have been eliminated from consideration. As a result, from dozens of possibilities, we have arrived at a set of criteria that separates numerous types of B2B businesses into six core clusters
The B2B Cluster Framework – Industries & Sectors
*Our B2B Cluster Framework draws upon company listings from Factiva, The Dow Jones Company, and industry classifications from the North American Industry Classification System. For more information, access the full report, “Transformations in B2B Go-to-Market Design: Connecting Strategy to Execution" here.
Curious how your B2B company fits within the framework?
As we mentioned above, the B2B Cluster Framework divides companies based on simple criteria that can be used to plot your own position on the X-Y axis that identifies the essential drivers of your B2B GTM below.
1. Sector Dynamics: “Does my business serve one sector or many?”
The number of sectors your business serves represents your Sector Dynamics, but how you answer this question isn’t about volume—it’s about your commercial model. If you serve many sectors, for instance, it will be important to understand how your clients use your product or service, and any differences in purchasing processes. This will allow you to adapt your commercial model to your clients’ needs, whether you decide to focus on a few sectors or all of them. By comparison, if you sell to just one sector, knowing how opportunities are concentrated among clients is key. If large players represent a majority of long-term contracts, customer loyalty and high service levels are key.
Answering whether your company serves one sector or many is the starting point for defining which tools, particularly segmentation, are of importance to your GTM in our B2B Cluster Framework.
2. Product / Service Dynamics: “How does my product or service impact my client’s reality? Is it core (essential) to their services, or complementary?”
This step is about understanding to what extent you impact your client(s). Knowing your Product / Service Dynamics is not a question of value but assessing what percentage or portion of your product or service accounts for your clients’ production. Do you enable their offerings through product range, knowledge, service level and so forth, or do you facilitate what they make or offer through raw materials or other components? If you are an enabler, your product or service is complementary, and if you are a facilitator, you are core—your clients cannot create their products or services without your company or another like it. Each situation corresponds to important actions and impacts. For instance, pricing is all-important in core products, as upticks make a direct hit on your clients’ bottom line. By comparison, practical actions that ensure smooth service and dissuade customers from switching to competitors are of value for companies whose products or services are complementary.
Product / Service Dynamics
Understanding whether your product is core or complementary for your clients has an impact on many tools of the B2B GTM, including your commercial model, commercial tools, service level, customer action plans and more.
3. Innovation Dynamics: “How important are innovations to my industry? Is innovation constant, or an opportunity to stand out?”
The way we answer this question is by determining whether innovation is a matter of “survive” or “differentiate” in your B2B world. Your response will dictate whether innovation must be embedded into the DNA of your company, or if doing so could help you win market share. For example, digital companies must constantly turn over new products, fix bugs and anticipate new conveniences just to stay in the game. A paper products company, by contrast, could introduce an innovation that improves margins and grabs attention, securing its future. Commercial tools as opposed to models—processes over structures—gain relevance here for those that have the potential to differentiate. By comparison, processes that guarantee product or service turnover are crucial in the survive category. They also impact the B2B GTM in terms of the company’s ability to communicate innovations to the market, the profile and technical ability of its professionals (sales force), how performance is assessed internally and other elements.
The importance of innovation to your B2B reality—a matter of survive or differentiate—is pivotal to determining how choices about product and services must be made, and if your company needs to embed specific capabilities among its professionals.
With the answers to these criteria in hand, you are no doubt already forming ideas or asking questions that will drive key actions of the B2B GTM. Multisector, complementary, differentiate? Single sector, core, survive? To begin plotting your position in the B2B Cluster Framework below, we’ve divided our three criteria between the X and Y axis, with Single Sector / Multisector corresponding to Y, and Product / Service Dynamics and Innovation Dynamics grouped into X. This delineates how you make your offering vs. the elements that influence your industry—your market dynamics compared to your commercial demands.
To better understand where your company fits within the chart, consider the same frame again, this time labeled by the core actions that define each cluster.
The B2B Cluster Framework – Essential Drivers
The B2B Cluster Framework – Essential Drivers labels each cluster by the key factors of influence and choice for each type of B2B GTM.
Do you see where you fit? Each title above represents the essence of the demands that should drive the actions of the B2B GTM for that cluster. How well does your cluster name describe the needs of your business? For example, in the “Focus and Conquer” cluster, as a multisector, complementary product or service provider with a lower rate of innovation, making choices about clients or sectors to “focus on and conquer” may help differentiate your B2B GTM by emphasizing tools that establish clear priorities and how to leverage service levels to develop winning customer relationships. To understand more about the top-level strategies for each cluster, see the chart below.
The B2B Cluster Framework – Top-Level Strategies
The B2B Cluster Framework – Top-Level Strategies briefly describes the actions and primary drivers of the B2B GTM for your industry or sector.
Top-level strategies are, however, only the beginning. Deep dive into a detailed review of each cluster, plus more ideas about differentiation here.
Don’t see your industry or sector, or have questions? We look forward to any opportunity to discuss our work further with you. Learn more about our Marketing & Sales practice and how to get in touch here.