Fitch warning : why B2C and B2B would react differently to a 100 point credit score drop

If you got a message, in the US, from one of the B2C  credit scoring agencies like Experian, TransUnion or Equifax- that you needed to pay some bills else your credit score would decline by 100 points… you will take take notice. You'd be even more  alarmed if you had a perfect 850 credit score. It is therefore intriguing why Washington DC does not take the Fitch warning of a downgrade of US sovereign debt from AAA as an absolute emergency. For credit rating for Businesses and Governments,is very similar to individual credit scoring.

In some part the answer lies in the very personal nature of B2C (Experian) and the sort of diffuse nature of B2B (Fitch).Experian is trying to put a credit score number on an individual's credit worthiness with other businesses (the individual being the C in B2C) and Fitch is trying to put a credit rating on the USA for its commitments to other organizations (B2B where one B is the US Government).

A   perfect credit individual has worked hard over the years by:

  • Not taking on excessive credit
  • Meticulously paying off bills on time
  • Spending within her/his means
  • Finding ways to earn enough to pay the bills

Such an individual has a lot of  personal "sunk cost" in building that perfect credit score.Any threat to that wonderful reputation would be vigorously addressed by the individual.Similarly, countries like the USA (already rated as AA by Standard and Poor) have taken decades to build the reputation for a AAA at Fitch.

Now contrast an individual with an organization, where there are several people involved, and things get complicated as in the buying center. Just as it is difficult to precisely predict how buying center  members will respond to a marketer's offering, so it is difficult to predict how organizational leaders react to imminent default and definite credit downgrade. The organizational leaders in this case include the President,Senate and Congress in Washington. Unlike individuals faced with a very personal credit downgrade ,Washington DC has leaders that are trying to appease their constituencies that might win elections in the future,but will be bad for America and the world financial system. This when the new Zogby poll has the President at a 45% approval rating and Congress has 13% approval and 85% disapproval.

If there is a some learning, although perverse, for B2B marketers in all of this – it is this:

  • B2B marketing and organizational behavior will be always complex.
  • Even with real time news,social media and the most accurate of polls and feedback.

So if you hear marketers say that B2C and B2B marketing is becoming similar, think back to the Fall 2013 US Government Shutdown and the Fitch warning and you can safely disagree. Contact StratoServe.

%d bloggers like this: