Avoiding the Pitfalls to B2B Success: Final in a four-part series

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.

Pitfall #4
Chasing the competition 

Chasing your competitors is the fastest path to the bottom, with only two possible outcomes: First, there is a very strong possibility you are following a competitor that doesn’t know where it’s going—and you will follow them down. Second, there is the possibility the competitor is right—and you will finish in second place.

Even if you do succeed in achieving sustainable, predictable, profitable growth in this way, you will only achieve it after your competitors. Stanford Graduate School of Business professor William Barnett calls this “Red Queen Competition”—you run faster and faster, but you never get ahead. 

Bottom Line:

If you chase your competitors, they will always have the edge. Don’t put your fate in your competitor’s hands. In the end, only one path to sustainable, predictable, profitable growth will yield industry leadership: a strategy grounded in the intersections between the needs of the market and a B2B company’s business model and core competencies.

geehangroup.comExecutive customer-focused strategies and tactics in The B2B Executive Playbook enable B2B companies to avoid the four common pitfalls. But even with this Playbook as your guide, it will take constant vigilance and commitment to gain the full benefits of your executive customer programs ©2017 Geehan Group

 

Read the other articles in this series:

Pitfall #1: Inside-Only Thinking

Pitfall #2: Limiting Input to End Users

Pitfall #3: Following a Single Customer

 

 


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.

Looking for more information on how to be successful in your B2B business? Download Sean Geehan’s free article “B2B: A Different Game.” Click here

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Avoiding the Pitfalls to B2B Success: Third in a four-part series

(c)Geehan Group

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.

Pitfall #3
Following a single customer 

It’s a common story: a new CEO takes the reins and goes to visit the company’s key customers to establish relationships, make sure promises are being met, say thanks, and offer access. On each of these visits, the CEO asks the CEO at the customer company, “What are your biggest issues?” and “What keeps you up at night?”

Terrific questions. 

But then things start to unravel. The CEO hears something at one account that strikes a chord. A big idea; a game changer. He comes home and redirects the company’s development teams, strategy, and resources, based on a single conversation. 

(c)Geehan GroupImagine having your entire leadership team, including functional heads, tethered to a single reference point – and that one reference point is a group of 10 to 25 true decision makers from your most important customers. Once or twice a year, they gather offsite to discuss developments in their industries, markets, companies, and specific areas of responsibility.

Executive Customer Advisory Council meetings have a transformative effect of leader-to-leader relationships, both externally and internally. The executive customers who attended the meeting now seek you out because you provided such a valuable forum for them to network and learn from their peers. They want to do more. They have become part of your team.

Case:

The CEO of a $10 billion manufacturing services company met with the president of his company’s biggest customer. The president suggested a solution to a problem with which he said twenty other major players in his industry were also struggling. This convinced the CEO to invest more than $100 million in developing the solution. Two years later, no one, including the original customer, was willing to buy the solution. The B2B seller had rechanneled its key resources, lost credibility in the market, fallen behind its competitors, and ended up writing off the entire project. 

(c)Geehan GroupBottom Line:

The only way to secure market alignment is to enlist a market collective to validate direction and major development projects. Most B2B offerings need a market, not just one customer. ©2017 Geehan Group

 

Read the other articles in this series:

Pitfall #1: Inside-only Thinking

Pitfall #2: Limiting Input to End Users

Pitfall #4: Chasing the Competition

 


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.

Looking for more information on how to be successful in your B2B business? Download Sean Geehan’s free article “B2B: A Different Game.” Click here

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Avoiding the Pitfalls to B2B Success: Second in a four-part series

Geehan Group 2017

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.

Pitfall #2
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. 

Case:

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.

Geehan Group 2017
Bottom Line:

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

 

 

 


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.

Looking for more on how to be successful in your B2B business? Download Sean Geehan’s free article “B2B: A Different Game.”  Click here 

 

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Avoiding the Pitfalls to B2B Success: First in a four-part series

(c) Geehan Group

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.

Pitfall #1
Inside-Only Thinking

The first pitfall is a mindset among the leadership team that goes something like this: “Hey, we’re smart and we’ve been in this industry for many years. Let’s brainstorm among ourselves and come up with the next great solution we can bring to market to change the game and win back our leadership position.” The leadership teams of B2B companies do indeed have deep stores of knowledge and creativity, but when they choose to go it alone, what they are really saying is, “We know better than our customers what they want and need.”

And this is a prescription for failure.

Far too often, the inside-only ideas and solutions that come out of these sessions are not created with current market conditions or even company resources, business models, and competencies in mind. In fact, they are usually based on legacy customer needs, current competitor offerings, or misguided ideas about a problem that may not even exist in the customer’s mind. This insular approach significantly contributes to the 60-70 percent product failure rate that continues to plague companies.

Case:

The leaders of a $1 billion company invested more than $100 million in developing a single solution they were convinced would revolutionize their market. They did this without asking a single customer to validate the idea. The result was a disaster. Virtually no customers wanted the solution because it couldn’t be integrated with their existing operations, and the few who did buy, demanded to return it for a full refund, plus damages. The stock tumbled, the leadership team was fired, and the company was sold off at a major discount to a company one-fifth its size.

Bottom Line:

Successful B2B companies systemically include their top customers in the development process. At Henny Penny, for example, all innovation and planning initiatives begin with the needs of customers and the market. “This is the backbone of our culture, strategic planning, and success,” explains President and CEO, Rob Connelly. With so many strategic and development alternatives to choose from, you must tap your top customers to prioritize, justify, and focus on those options that will deliver the most impact. Leveraging their industry knowledge through “outside-inside” thinking is the best way to secure market alignment and achieve profitable growth over the long-term.©2017 Geehan Group

Read the other articles in this series:

Pitfall #2: Limiting Input to End Users

Pitfall #3: Following a Single Customer

Pitfall #4: Chasing the Competition

 

 


Looking for more on how to be successful in your B2B business? Download Sean Geehan’s free articleB2B: A Different Game.”  Click here 

 

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Customer Retention is 24K Magic

It is simple: Everyone gets excited when a new customer is signed. There’s a celebration, bells are ringing, and lots of recognition and rewards are handed out. Song’s like the Bruno Mars' “Uptown Funk” or “24k Magic” are blasting in the hallways and everyone feels as though the most popular person in school just asked them to prom.

Been there, done that: But let's think about your customer retention for a minute. How much celebration is there when a long standing customer renews for the 6th straight year? Forget that they haven’t bid out the work in 3 years (no competition=greater margin) and they are already in your system (low cost of support, faster payment = greater cash flow).

It still only generates the excitement of listening to a has-been, one-hit wonder backup band like the frosted haired Vanilla Ice. Yes, you’re at a concert, but it’s short and stale.

Now the reality: Here's the bottom line. It costs 3-5 times more to acquire vs. retain a customer. Getting your current customers buying more of your stuff means it’s harder for them to leave you (increased switching cost) and current customers are much less likely to bid out your work (increasing profitability). Shouldn’t you evaluate how your how you are spending your sales and marketing dollars? If that sounds like your firm, don’t fret. Even carpools and Karaoke can be cool (thanks to James Corden). 

Opportunity: Evaluating your sales and marketing mix today re-prioritizing the balance of acquisition to account growth can make a huge difference in top and bottom line results. Now that’s something the entire leadership team will be thrilled to hear about. 

 

Just maybe then you’ll become the most popular person in the company (or at least the leadership team) and the CEO throws you the keys to the company G6, backstage passes, and VIP access to the after-party on the Bruno’s current tour. Now that’ll generate 24K Magic in the air!

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B2B Strategy Case Files: What If Both B2B and B2C?

When we wrote The B2B Executive Playbook, I had every hope it would forever change the hearts of minds of B2B enterprise.  Recently, however, my colleague and B2B strategy guru @seangeehan received the following email from “Still B2Cing," so I guess our work is not completely done.

 

Oh yes, we’ve seen this situation many times, and it is particularly pernicious as the challenge lies on two fronts:

  1. The overall enterprise has both B2B and B2C markets, such as a manufacturer who sells both direct to consumer and through a distribution network, as well as a massive organization like GE.  No one could possibly believe the executive who runs the GE lightbulb division has the same approach to growth and profitability as GE Aircraft. Unless the ELT understands the differences, most often we see the executives with the flashier high-profile B2C resumes take charge, and it is most often a disaster for the B2B side of the business. Hybrid organizations such as these are the most difficult to manage and grow unless you have the right playbook in place for the each side of the business.

  2. Ex-P&Gers who won't or can't adapt (or insert here alumni from most consumer packaged good companies). These proven, smart folks tend to struggle in their transition to most non-CPG companies, but especially when they move to B2B.  Most of them stick to what they know, apply the same go-to-market methodology/formula, and expect similar results.

The most common example of hybrids are financial institutions who have both consumer and commercial segments.  Because the hybrid situation is so prevalent there, we showcase Wells Fargo in The B2B Executive Playbook and how they address their hybrid organization, particularly the B2B side.  They have adapted specific B2B practices to address the commercial side of their business. Very smart.

Other industries that commonly have both B2B and B2C markets and offerings include hotel and hospitality, as well as computer and technology (Microsoft, Symantec, Dell).  Let’s take Dell for example. After successfully making B2C history selling PCs to consumers, as a growth strategy Dell began acquiring B2B firms (middleware, integrators, etc.) and building solutions for B2B customers (e.g., mainframes).  However, they did not change their go-to-market strategy and approached CIOs fairly similar to how they marketed to college students.  It didn’t work, and eventually Dell went private after stock tumbled. Our company, along with Dell’s biggest corporate customers, tried very hard to get them to understand that a different approach was needed. The CMO didn’t agree (ex-major CPG executive) despite our very “dynamic” conversations.  Suffice it to say, that CMO is no longer there, which is the unfortunate outcome we have seen for so many talented B2C executives. 

Facing similar challenges, both IBM and GE have all but left the B2C world, and one reason is they found it difficult to do both successfully for mostly the same reasons as other B2B/B2C hybrids.  Either you invest to execute different strategies, or you focus on one. There really isn’t a “one size fits all” solution.

Sean points to another notable example, Cisco. The B2B stalwart tried to get into the B2C market and failed miserably: $4-6B write down and complete shed or shut down of most of their B2C business. 

Sean focuses pretty hard on the topic of differing strategies for the two worlds in chapter two of his book.  The picture below provides a great reference point for where the approach differs between B2B v. B2C, and it primarily lies in go-to-market strategy: marketing, sales, and the biggest buzz-word today, innovation (R&D).

The one key element missing in this picture is service.  Service delivery may overlap or not, depending on industry and model.  The important point is you have to realize there may be key differences which need to be identified and addressed.  For more advice from Sean about this and other B2B strategies, check out his B2B Customer Strategies blog.

So take heart, Still B2Cing, there is hope!  Experience has taught us that if you can convince B2Cers they have landed in a different world AND they are curious and willing enough to learn and adapt to their environment, the path to sustainable, predictable, profitable growth (SPPG) becomes quite clear and straight-forward to navigate.  The missing link is found!

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Thank You, Customer Success, for Uniting Marketing and Finance

“Over the years, I have come to dislike marketers,” a CFO at a $350M company recently told me.  “I have found they just aren’t good business people.”

I couldn’t help but smile and explain to him how his mind was about to change.

During the past several weeks, I've had the opportunity to work with my colleague Sean Geehan and the smart folks at Strikedeck to better understand the nuts and bolts of B2B marketing’s new priority, Customer Success.  Before this time, the Finance snob inside of me assumed “Customer Success” was just another slick label marketing had put on the tried and true function of customer service or the practice of simply following the immortal words of James Cash Penny, “The well-satisfied customer will bring the repeat sale that counts.”

I don’t know who gets credit for the name “Customer Success,” but my cohorts in Finance should scoff no longer.  Despite its glib name, disciplined Customer Success is serious business (over $50 million committed by the US venture community on solution providers), and it can make or break players in the Cloud Subscription XaaS Economy.  According to the Customer Success Association, “Across the SaaS B2B sector, the choice is becoming clear.  You either actively manage your customer relationships as strategic portfolio assets, or you effectively cede control over them and your company’s future to chance and/or the competition.” 

Whoa. Those kind of words place Customer Success at the crux of SaaS company strategy, so much so that the CS Association advises, “The ultimate strategic goal of the Customer Success role is sustainable corporate profitability and growth.  The method is to make your customers as profitable and productive as possible.”  With such an important strategic imperative, Marketing, who has to date been driving most Customer Success initiatives in XaaS companies, is now placed in an even more significant position.  I wonder if these marketers realize their elevated status (most think they are still low men and women on the corporate totem pole), or that to take advantage of it, they get to think again about a group to whom they can't help but feel a gravitational pull: Users.

"The fate of your B2B company rests in the hands of a few people," our team has said for years about the connection between executive decision makers and B2B strategy.  While this is still extremely true, in the SaaS model, users are taking back some of the attention because the adoption and use of their seat licenses have become a significant factor in determining the economic value borne by the purchase of SaaS technologies.  And, more importantly, it has become the onus of sellers and their technology to make sure users adopt and use it.  As such, a subscription based business is probably the closest a B2B organization has been to needing to consider users and their happiness strategically in quite some time. Furthermore, the importance of keeping user cheeks happily in license seats requires Marketing and Customer Success to plan, coordinate, monitor, and possibly even design most of the major functions of service delivery.

As one example, let’s look at one of the primary drivers of adoption and use: training.  In the not-so old days as a user, it was his responsibility to learn and adapt to whatever technology the decision makers several levels above his pay grade chose to purchase and install (I am reminded of a major software conversion required at a major US bank because the CEOs at the two companies golfed together).  To learn the new system, users might get to attend a class or benefit from hands-on training, but many times it came in the form of a set of very large binders through which time had to be found to dig and find answers.  Online training later offered a more efficient Q&A search tool, but again, the content was fairly static (and boring) and nowhere near our modern day definition of “interactive.”  All in all, learning the new system on which a user performed his job was really his responsibility, if he wanted to perform well.  The technology wasn’t going anywhere, or at least until when GAAP said it could.

Today, learning the system is no longer altogether the user’s responsibility.  Users expect the technology either to be intuitive enough so that even a caveman could use it, or to teach them with on-demand “Live Chat” training and quick answers to their questions in forums and chat rooms.  In fact, when I talk to millennials about their jobs, they expect to be taught how and when they want to learn.  If they don’t feel competent quickly enough - or they just don’t like the technology - they just won’t adopt and proceed to influence a move to an alternative.  It’s “There's another app for that” mentality. There is always another app or similar technology that can do the job just as well, but maybe it has better chat rooms with more clever emojis.  When their employers see adoption is low, they can scrap the technology by unsubscribing and moving their data elsewhere.  Gone are the capital expenditures that had to be amortized and force users to use or lose.

The Technology Marketing and Sales research and services company ITMSA recently held its annual Marketing Leadership Forum which included a panel discussion of leaders from Amdocs, Cisco, and Oracle on customer experience and customer success and the role marketing must take in both functions.  In his summary of the session, ITMSA President CEO Dave Munn notes the perspective of Steve Pinedo, vice president, Oracle Global Cloud Customer Success, “the shift to the cloud is driving dramatic changes in customer expectations for technology based solutions, with new demands for immediate and frictionless support and value at every stage of the relationship.  From a marketing perspective, this puts customer success front and center, and makes reducing customer churn the number one KPI.”

Customer Churn.  This is where the finance nerd inside me really takes notice.  As Sean wrote in his recent post "Customer Success: Applying Science to the Art of Customer Engagement," churn (the rate at which customers leave) is the metric which could finally give marketing and customer engagement a measurement by which these efforts have a benchmark, and benchmarks mean funding and more importantly, credibility and stature with The ELT. 

Armed with churn rates, Marketing may now have the words Finance has longed to hear.  Whenever Sean and I speak to a group of CFOs or financial leaders, we remind them of their right to demand ROI on the investments they make in marketing.  Unfortunately, their marketing peers have struggled to find an irrefutable number by which they can say, “Our programs elevated our position to Leader in Gartner’s Magic Quadrant,” or even, “Our efforts contributed to raising our market cap.”  The churn rate statistic erases this previous shortcoming as the metric becomes more heavily weighted in technology evaluations and company valuations.  Marketing leaders can now say, “Our Customer Success Program, with its new onboarding engagement plan, has lowered our churn rate and brought us a new round of venture funding.”  With this type of measurable contribution to the organization’s growth, how can a CEO or CFO not take notice?

Marketing has an excuse no longer to shy away from numbers and figures, and they should embrace this opportunity to take ownership of measuring, monitoring, reporting, and hopefully bragging about their contribution to low churn. This might be an overstatement, or even blasphemy, but marketing finally has a reason to embrace at least one statistic.  And they get to talk about user decision making behavior again.  Win-Win!

I end here by sharing a graphic I found on the Customer Success Association website because I think it effectively ties together the relationship between Customer Success, retention, and profitable growth.  It's a picture to rally around and unify all the corporate languages.

 

 

 

 

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3 Keys to Retaining and Growing B2B Revenue

In the B2B World, 80% of your revenue comes from 20% of your customers. The reality is that losing just 5% of those customers could potentially sink your organization. So in this age of big data and rapidly evolving technology, what are the best ways to retain and ultimately grow those customers?

B2B companies must meaningfully engage with their customers to evolve loyalty into advocacy, and engagement begins with a relationship.  Through our work with over 50 leading B2B companies, we have found time again the following three key relationship building practices lay the foundation for account retention and growth:

1.    Educate, Don't Sell.  B2B relationships start with education, not a sales pitch. Educate yourself on your customer's industry, market, challenges, and opportunities, and then demonstrate how you can show them a path forward.  Providing relevant content through discussions and forums, blog posts and articles, and research is an excellent way to establish your credibility and begin the customer loyalty to advocacy journey.

2.    Customer Advisory Boards create a platform where you can leverage happy customers and drive innovation through customer co-design and collaboration. The end result is overall market alignment in offerings, communications, and strategy.

3.    Executive Summits bring key decision-makers together to preview a strategy, product, or market innovation. Through these focused exchanges, customers become first-to-know, first-to-buy, and first to advocate your solution in the marketplace.

Structured, proven, and dynamic educational forums, customer advisory boards, and executive summits help organizations develop a deep understanding of market conditions while building the rapport with key executives. This powerful formula turns customers into true advocates and is the best recipe for retaining and growing your top customers.

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B2B Marketing's Huge Opportunity to Drive Profitable Growth

Marketers often times find it easier to apply the trusted tenets of B2C marketing to B2B selling. Unfortunatley, they then end up with disastrous results because of B2B marketing’s more complex and lengthier buying cycle. While some basic rules apply, B2B marketing is quite different and needs different tactics. It demands marketing involvement for a longer time, and with more specificity.

What else makes B2B marketing different? What should marketers change to get more results from B2B campaigns? How can a B2B marketer connect with customers and leverage innovation to drive business growth?

Join this free webinar sponsored by Regalix for a chance to engage directly with Geehan, as well as other marketing professionals. Don’t miss this insightful discussion on:

  • Unraveling the differences between B2B and B2C
  • Increasing marketing’s credibility with the Leadership team
  • Aligning strategies to market needs
  • Engaging & leveraging your most valuable customers
  • Achieving sustainable, predictable and profitable growth

All registrants will receive an abstract from Sean's National Best Seller, The B2B Executive Playbook.

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On-Line CABs Great for Users, Limited for Executives

Recently, a great question surfaced on LinkedIn about CABs: “Has anyone here implemented a successful online CAB group? If yes, how successful has it been?”

I find that online CABs can work well in certain areas, but have limited effectiveness in others.  For instance, with user groups and focus groups where you’re seeking incremental insight, online collaboration can be a great tool for getting input on feature/functionality or refining a product/service. 

On the other hand, if your CAB is more strategic in nature, and your members are the level of Senior Director or above, a face-to-face environment is more appropriate.  When seeking advice on your strategic direction, the conversations progress into deeper discussions – about business challenges and understanding your customers’ priorities, industry trends and sharing of market insights.  Face-to-face engagements build a certain degree of trust and provide a safe environment for sharing and networking, which we find results in a genuine “bonding” of the group.  Members appreciate the professional accomplishments and relish the personal relationships they develop.  Council meetings feel like “reunions” and customer members become advocates. 

Having said this, once these types of relationships and trust are built in a face to face meeting, online meetings can be effective supplement for small working groups between the face-to-face engagements. 

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