by Dan Adams, president of Advanced Industrial Marketing and author of “New Product Blueprinting: The Handbook for B2B Organic Growth“
Right now our economy and our nation feel anything but business-friendly. Just a glance at recent headlines shows you the challenges we face: the (latest) debt ceiling crisis, the recent federal government shutdown, the Obamacare hurdles we must jump, plummeting consumer confidence. In fact, so many leaders are so caught up in all the handwringing and teeth-gnashing that they’ve lost their grip on the entrepreneurial spirit that brought them to the party. They’re afraid to hire, afraid to spend, afraid to risk. Just… afraid.
Yes, on the surface it may seem like the worst of times for businesses — but for those willing to take a few risks, it’s actually the best of times.
When everyone else is playing defense, playing offense sets you apart. The best time to leap ahead is when everyone else is standing still, cutting back, holding off. Hesitation is not a viable business strategy. Innovation is.
In other words, we B2B types have a choice: We can remain paralyzed, fearful of what outside forces might do next, or we can boldly forge ahead and grab our competitors’ share of the marketplace. We can innovate ourselves out of this mess.
Of course, we all know in theory that life rewards action. But here’s the rub: It rewards only intelligent, well-researched action that results in positive customer outcomes. And that kind of action has little to do with creating corporate ego-fueled products or with panic-stricken attempts to put something — anything! — out in the marketplace and hope it strikes a chord.
Innovation isn’t about flinging products willy-nilly against the wall to see what sticks. Nor is it about building a product you and your employees love and waiting for the adoring masses to arrive. ‘If you build it, they will come’ may have worked for Steve Jobs, but it’s not likely to work for you. More to the point, you can’t afford to waste your time, energy, and money on hopeful guessing.
For B2B suppliers, in particular, I hail the virtues of first understanding market needs and then developing supplier solutions to meet them. In fact, my New Product Blueprinting method — comprised of practical methods, skills, and tools that have been finely tuned on six continents and in hundreds of industries — centers on this “ask before you innovate” philosophy.
Here are some tips:
What do your employees think your company’s purpose is? You might assume, as many leaders do, that it’s “maximizing shareholder value.” Maybe so. But does that dry phrase sound like something that will get employees revved up? Not likely.
To get full engagement from employees, you need to teach them a new mantra — and that mantra is “The goal of our business is to understand and meet the needs of our customers.”
Suppliers’ employees can get very excited about their future when they see how they can directly impact it. And of all the ways they can impact it, there’s probably nothing more exciting for them than innovating in a way that makes the customer happy… and in turn causing the supplier to grow in a profitable fashion.
When the Venn diagram circles of ‘Happy Customer’ and ‘Happy Boss’ come together, everyone’s happy! And the only way to make B2B customers happy is to deliver significant, measurable, economic value to them.
2. Master the art of competitor benchmarking.
All suppliers say they want to deliver value to their customers. But no customer will pay more for a product that matches existing value, only for one that exceeds it. What you really need to do is deliver value beyond the customer’s next best alternative. That means making sure you quantitatively understand that next best alternative. If you don’t, then how can you design and price your product and know whether it’s worth pursuing in the first place? You’ll just be guessing, hoping for the best, and burning scarce, costly resources in the process.
Here are four steps you can build into the front end of your new product development process:
Step 1: Identify benchmarking outcomes.
So your new welding machine provides a smoother bead, is more portable, and has more power options. But what if customers really care about faster set-up time, reduced energy consumption, and productivity data collection? You need to find this out up-front.
Step 2: Identify benchmarking alternatives.
Don’t just identify products that look like yours. Make sure you understand the capabilities of other welding machines… but don’t overlook mechanical fasteners and structural adhesives, if these are viable alternatives.
Step 3: Identify benchmarking test methods.
Don’t just use test methods that are convenient or comfortable for you. It’s all about the expected customer experience. How can your testing simulate the value customers seek in key outcomes?
Step 4: Identify benchmarking levels.
How good is good enough? If competing welding machines take ten minutes to set up and your new product design calls for five minutes, will your customers be impressed?
Start by requiring a serious discussion on customers’ next best alternatives during your stage-gate reviews. The most dangerous stage-gate conversations are those that don’t take place. You could miss a brilliant opportunity to modify or kill a new product project.
3. Make sure your innovation is TRULY customer-centric.
Most B2B suppliers believe that they are customer-centric. Most often they are actually supplier-centric, which leads them to approach innovation from a place of flawed thinking. For instance, most suppliers think in terms of competitive products when they should be thinking in terms of customer alternatives (as described earlier). Likewise, they seek to validate hypotheses (Asking “You do need this product, right? Right?”) rather than uncover outcomes (Asking “What problems are you having?” with no idea where the customer will take them).
These are just two of the shifts in thinking most suppliers need to make. Making these shifts is no trivial matter. In fact, it changes everything about your interaction with customers. You end up uncovering options that truly excite customers, and excited customers open up their wallets.
4. Directly engage the customer in the innovation process.
(Hint: That means moving beyond basic VOC interviews.) I have seen six distinct levels of customer engagement during product development. At one end of the spectrum (Level 1), suppliers sit at the conference room table and brainstorm what customers might want. (Call this VOO: Voice of Ourselves.) In the middle are customer surveys and polls. At the far end of the spectrum (Level 6) are B2B VOC Interviews — several notches above qualitative Voice of the Customer Interviews.
Unlike end consumers, B2B customers are knowledgeable, rational, and interested. B2B-optimized interview methodology fully engages them so that you can take advantage of these qualities. It helps you learn precisely what customers are willing to pay for, it helps you ask the right questions, and it helps you pre-sell the product so that your target market is primed to buy when you finally launch the new product.
5. Prime the customer to buy the product — even before it’s developed.
The best part about engaging customers using New Product Blueprinting methods is that it results in products they’ve already told you they need — and that, in fact, they helped you design. By asking customers what problems they face before you ever develop your product, you avoid having to convince and cajole once the product is on the market. There is no reason to “sell” people on what you’ve already agreed — together — will solve their problems and help them thrive.
This is a much, much better way of getting products into the hands of companies that need them. It allows you to dispense with high-pressure sales tactics and get on with the business of truly serving customers. Transactions are far more rewarding, in every sense of the word, for both parties.
There is no substitute for building solid business relationships based on the delivery of real value. And in a tough economy, they’re the only kind of relationships any of us can afford.
Not only does the bold pursuit of smart innovation save you from wasting time and money on failed guesswork, it deeply engages employees and creates customer goodwill. Repeat business and referrals flow like milk and honey, and everyone thrives. Meeting customer needs feels good to everyone, and it’s human nature to do more of what feels good.
Let’s quit running scared and find our fighting spirit again. Let’s make things people need and watch as they transform marketplaces. Let’s turn industries upside down. I can’t think of a better response to any challenges the Washington bureaucrats and the economic doomsayers throw our way.
Dan Adams is all about B2B product development: His free e-book, 32-page e-book “Reinventing VOC for B2B: 12 New Rules from New Product Blueprinting” looks at creating irresistible products, and his 2008 hardcover book, “New Product Blueprinting: The Handbook for B2B Organic Growth“, clarifies the “fuzzy front end” of innovation. As president of Advanced Industrial Marketing, he conducts training workshops in every region of the world.