Understanding category creation for B2B brands in 2023

Looking for a way to stand out in a crowded B2B market? Find out why category creation could be the answer, and how to get it right.

Category creation is a pretty complicated topic, even if you narrow your focus by industry. A topic as broad as B2B lead generation, which could cover any product or service that caters to startups, is even harder to summarize. This is why B2B companies invest in category creation.

What is category creation?

Category creation is a fairly recent term that describes a marketing tactic. In the most simplest terms, category creation is the act of creating a new space in a specific market. B2B is an oversaturated market, but category creation gives businesses a chance to truly stand out.

Category creation is considered one of the best B2B demand generation tactics because it flips the market on its head. It allows businesses to offer something customers can’t get elsewhere.

Hubspot is a prime example of category creation in action. They saw how people were changing the way they shopped and bought and integrated with businesses. To this end, they made the category “inbound marketing,” which focuses on creating valuable content for customers.

First to bat is the last standing

When the first iPhone was released in 2007, it took the world by storm. It was the first smartphone that didn’t use a stylus or text pad, but contrary to popular belief, it wasn’t the very first smartphone. It also isn’t the only smartphone, but it consistently outperforms others.

In the modern day, the iPhone isn’t anything special. In fact, plenty of other companies make better smartphones than Apple, and for much cheaper, so why do people buy the iPhone?

Because they created a product category. The iPhone didn’t simply improve on the smartphone; they modernized it. The iPhone has such a major hold on the market that the Google Pixel can’t even outsell Huawei, despite its massive name and an exceptionally better camera.

How B2B companies can create a new category

While investing in category creation is a great idea, it isn’t easy to separate yourself from your competition. However, you can carve out a niche for yourself if you start paying attention.

Here are three tips for creating a new category.

1) Pay attention to context

Hubspot was able to break into a new market because they noticed the downturn of pay-per-click ads during the economic downturn in 2008. Their shift to organic traffic solved a big business problem. You have to do the same.

2) Become the solver

Category creators should be at the top of the mountain, but there’s room at the top. You have to actively market yourself as the best without pushing down the little guys. For a category to be valuable, it has to have more voices in the market.

3) Be in it for the long game

Creating a category takes a long time, and you can’t give up when you’re sick of marketing your message. It takes consumers some time to get used to a new product or service. If you truly believe in the product, keep on marketing it.

Category creation is tough. Many businesses fail, and it often feels safer to improve an existing product. You can do two things at once, but don’t underestimate the power of a new category.

Improving the old versus inventing the new

While a B2B company can live in an existing category and make a profit, it’ll become harder and harder for them to differentiate themselves from the competition. A B2B company can improve their software to the point that it eclipses the category king, but it won’t matter.

If a B2B company wants to generate long-term success, they need to invest in category creation. When it works, category creation can build brand awareness, sharpen internal focus, and fuel sales conversions. It creates a moat around your business that can’t be breached.