B2B Innovation: Worth the Challenge

Business-to-business suppliers feel pressured to overhaul their sales approach and facilitate a technology-advanced, streamlined purchasing process for procurement officials. But not everyone is heeding this call. A new report released by Sparks Grove on Friday (Feb. 27) reveals that innovation within the B2B space is in its infancy – many companies considered “innovative” have yet to even form a consensus as to the actual definition of “innovation.”

There are clear challenges B2B companies face when reaching out to new customers. The new study, titled “The Pursuit of Standard Operating Innovation,” explores how innovative suppliers and their marketing efforts are, and finds that for those companies overcoming these hurdles and nurturing the innovative process, the positive impacts to their enterprises are far-reaching. According to Sparks Grove Vice President Rob Sherrell, obtaining these benefits is no easy feat, but it is worth it.

“Real value from innovation efforts is available,” he said, “but as you’ll see, it’s a ton of work to get there. And it’s not a one-time thing. It’s an all day, every-day, standard operating approach that is driving the evolution and revolution of B2B enterprises.”


To determine which of the B2B companies surveyed fall into the category of “innovator,” Sparks Grove inquired about how these B2B companies prioritize (or ignore) innovation in the workplace. According to the research, innovative B2B suppliers are those that measure innovation on the basis of speed, quality and quantity; that designate a budget for innovation; that balance “breakthrough” innovation with incremental improvement; and that allocate work time to encourage innovative thinking.

The survey found significant gaps between traditional companies and innovative companies when asking about these factors. For example, only 30 percent of traditional B2B marketers were found to designate a budget for innovative initiatives, versus nearly half (49 percent) of innovative companies doing so. Similarly, only 24 percent of traditional companies allocate time for innovative thinking, versus more than half (51 percent) of innovative companies.

Even with these patterns among innovative versus traditional B2B sellers, businesses do not come to a consensus as to what exactly defines “innovative” – a finding made even more peculiar considering that Sparks Grove found significant consistencies among companies that self-report as “highly innovative.”

For example, while nearly half of innovative companies were found to allocate budget and time for innovative efforts, only 15 percent of all businesses surveyed defined innovation as “allocating resources for creativity and experimentation.”


In addition to companies having yet to clearly define the term “innovation,” there remain significant hurdles for suppliers to initiate innovative strategy. While companies categorized as innovative by the study reported fewer hurdles to their innovation efforts, all marketers reported common roadblocks.

For example, 35 percent of all marketers surveyed said a traditional mindset within their enterprise hampers innovation, including 27 percent of innovative B2B marketers. Other common challenges felt by marketers – innovative and traditional – include a company’s aversion from risk and a low tolerance for failure.

For innovative marketers, resistance to ideas from non-executives and resistance to accepting outside views also topped their list of challenges to innovative efforts.

So why do B2B marketers innovate at all, considering these hurdles? “In part,” the study declares, “because they have to, because they are under greater sector or individual stresses than the mainstream. But they may also sense how their customers’ evolution demands innovation to match it.”


The literature that touches upon the need for suppliers to update and strengthen their sales tools is extensive. But innovative sales strategies – for example, using social media to reach buyers – have not yet convinced marketers of their full potential. A recent study by CMO Survey found that 45 percent of chief marketing operators have not seen how social media marketing efforts impact their business. Additionally, 40 percent of CMOs are underwhelmed by the quantitative impact of these efforts.

The evolution of the B2B customer remains an underlying theme in the debate over supplier sales efforts. Buyers are demanding more high-tech efficient buying experiences, and suppliers risk being left behind if they do not adjust to these demands.

But if a B2B marketer does not see the benefit of innovative sales tools and techniques, why bother?

Sparks Grove remarks in its report that while B2B sellers do not offer a consistent view of what constitutes “innovation,” suggesting that marketing innovation is still in its infancy, there are already concrete, visible benefits to innovative efforts for the whole enterprise.

Sellers exploring innovative strategies to reach new customers found a significant connection between their initiatives and company finances: 30 percent agreed that their 2014 revenue was related to innovation, and 26 percent attributed their 2014 revenue growth to innovation. The marketers additionally reported, on average, a more than 20 percent customer retention rate as being a direct result of innovative efforts within 2013 and 2014. The respondents that use the Net Promoter Score customer satisfaction index associate about 30 percent of score improvement to innovation.

The data pinpointed that as a whole, suppliers that innovate both acknowledge and experience the benefits of their efforts to all aspects of their company – not just customer satisfaction and retention.

For example, findings indicate that 47 percent of innovative B2B firms report an impact of their strategies on their companies’ finance and forecasting, compared with just 16 percent of all marketers surveyed.

Innovative B2B sellers exploring new ways to find more customers also saw an impact on their firms’ executive management and strategy, product development and customer service. In contrast, less than half of traditional firms said the same.

Plus, in exploring new ways to market their products, suppliers can obtain significant data about what works and what doesn’t. The capability of data aggregation and analysis, the study concluded, “can help the finance organization bring organizational data and intelligence to life in a way that can impact financial decisions and how ROI is viewed.”


Suppliers may be snail-like in catching on to technology advancements that can facilitate operations, but those that are innovative in their marketing, sales and customer interaction techniques are already reporting widespread, positive impacts on their companies. But there is still far to go.

For example, the study notes that while innovative B2B sellers report a significant impact of innovation on their executive management and strategy more than traditional sellers do, there are still half of those innovative marketers that do not realize this impact. “As the group best placed to understand the rapidly changing customer and marketplace, marketing should be fueling change throughout the enterprise,” Sparks Grove concludes. “Therefore this influence gap presents both a real danger and an opportunity.”

Overall, the research suggests that, considering the positive impact across the supplier enterprise, more B2B marketers should be innovating the ways they interact with consumers and complete sales. Suppliers as a whole should be nurturing these efforts, and must acknowledge the position of their marketers as key players that understand the changing demand of the B2B buyer.

“If B2B organizations are to survive in the face of industry disruption,” Sherrell said in an introduction to the study, “your rate of learning, innovation, and performance improvement must match or exceed that of your competitors.”