Right now our economy and our nation feel anything but business-friendly. Just aglance at recent headlines shows you the challenges we face: the (latest) debt ceiling crisis, the recent federal government shutdown, the Obamacare hurdles wemust 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. Justâ€¦ afraid.
Yes, on the surface it may seem like the worst of times for businessesbut 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 boldlyforge 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 liferewards action. But here's the rub: It rewards only intelligent, well-researched action that results in positive customer outcomes. 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. You can't afford to waste your time, energy, and money on hopeful guessing.
For B2B suppliers, in particular, I extol the virtues of first understanding market needs and then developing supplier solutions to meet them. In fact, my New Product Blueprinting methodcomprised of practical methods, skills, and tools that have been finely tuned on six continents and in hundreds of industriescenters on this "ask before you innovate" philosophy.
I offer the following tips:
- First, get employees excited about the future. 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 mantraand that mantra is "The goal of our business is to understandand meet the needs of our customers."
- 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 valuebeyond the customer's next best alternative. That means making sure you quantitatively understand that next best alternative.
I offer four steps youcan 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 reallycare about faster set-up time, reduced energy consumption, and productivity datacollection? You need to find this out up-front.
Step 2: Identify benchmarking alternatives. Don't just identify products that look like yours. Make sureyou understand the capabilities of other welding machinesâ€¦ but don't overlook mechanical fasteners and structural adhesives, if these areviable alternatives.
Step 3: Identify benchmarking test methods. Don't just use test methods that are convenient or comfortable for you. It's allabout 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?
- 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).
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 tableand 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 Interviewsseveral 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.
This post was first seen on MRFTECH.com. The post was written by Dan Adams, president of Advanced Industrial Marketing.This is the first of a two part series on Innovation and B2B customers. Follow the LEAN Accountants Blog for part two of this post. In part 2 Dan will talk about the 9 ways to engage B2B customers. To learn more about LEAN please contact the LEAN Accountants of McKonly and Asbury, LLP.