In my B2B Executive Playbook, I take my readers through the four steps that can simplify strategic planning, focus product development and sales and marketing efforts, and most importantly, create a clear path to market leadership. In this four-part series, Avoiding the Pitfalls to B2B Success, I review the common pitfalls that challenge B2B firms. Be aware of them and act quickly if they surface in your company.
Limiting Input to End-Users
The second pitfall is triggered when B2B companies depend too heavily on customer input gathered from end users. This overdependence usually results in more of the same. Most companies are very good at establishing customer dialogue at this level. However, end user input is typically focused on product improvements aimed at maximizing the user experience. As Henry Ford is reputed to have said, “If I’d asked my customers what they wanted, they’d have said a faster horse.”
The problem with endlessly adding features and functionality to products is that at some point it no longer adds business value for the customer. And if there is no added value, executive customers will not pay a premium for incremental improvements. Thus, more bells and whistles equal higher costs and lower margins.
Leaders can become too focused on the users they interact with and not on the business issues the company was hired to solve. They find they’re talking to people at the wrong level, taking them off track, which then begins to marginalize the business and value.
A $100 million manufacturer produces high-quality industrial tubing that is the Rolls Royce of its market. This tubing exceeds the current industry standard for tolerance by 50 percent; the product has never failed in the field. When we met with the company’s leaders, they proudly informed us that they were working to raise the tubing’s tolerance to 100 percent above the industry standard.
This excited customer engineers (end users of the tubing), who thought the additional tolerance would be “great to have.” Unfortunately, no customer projects or plans required anywhere near this new tolerance level. Further, executive customers knew the proposed tubing far exceeded tolerance levels that had been successful for decades, and they saw no reason to pay a premium for it. It was a classic example of over-engineering in pursuit of a better user experience.
In the B2C world, where the consumer is the user and the decision maker, it works just fine. I’m thirsty, so I buy and drink a Diet Coke. If I like it, I do it again and again. But in the B2B world, user satisfaction does not necessarily result in customer retention or increased sales.
Ultimately, executive customers fund your company and decide with their dollars whether your strategy (in terms of offerings, pricing models, direction of industry, etc.) is successful. You should secure input from as many customer levels—purchasing agents, users, influencers, and decision makers—as your budget and resources allow, but always remember that it is the decision maker’s input that matters most. So, start with your executive customers.♦©2017 Geehan Group
Read the other articles in this series:
Sean Geehan is founder and CEO of Geehan Group, National Best Selling Author of The B2B Executive Playbook and a celebrated speaker. Sean has more than 25 years’ experience successfully guiding B2B executives to sustainable, predictable, profitable growth for their organizations. To schedule Sean as a speaker, contact him at (877) 226-1621 or visit www.geehangroup.com.
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