Featured Product
This Week in Quality Digest Live
Quality Insider Features
Harry Hertz
Or are your employees more important?
Hanen Khemakhem
New study finds healthy and ethical company culture can prevent more fraud than its board of directors
Gleb Tsipursky
Three reasons companies wait too long to make obvious decisions
Bryan Christiansen
Calibration is the key to accurate measurement
David L. Chandler
Greater sensitivity and speed for industrial inspection, airport security, and communications

More Features

Quality Insider News
Features customer-driven updates to training management, empowers staff to drive quality improvement
Review will assess how Baldrige Performance Excellence Program can best advance U.S. competitiveness
Weighing supply and customer satisfaction
High-performance polymers for use in high-temperature range developed for 2PP 3D printing
High accuracy to +/– 0.00005 in. and IP67 protection from hostile shop environments
Specially designed for automated SMT/SMD assembly and solder reflow mounts
Technique may enable energy-efficient 3D printing of blades for gas turbines or jet engines

More News

Dan Adams

Quality Insider

You Do Need This Product, Right? Right?

Seven deadly sins that stunt organic growth

Published: Monday, January 25, 2010 - 05:30

If you’re like most business-to-business (B2B) suppliers, you’re probably making certain predictable mistakes that can greatly affect your ability to compete. Unless your company has smarter employees, some inherent unassailable advantage, or a markedly different approach to satisfying customers, those competitors always seem to throttle your growth. But what if you and your competitors were committing some serious mistakes that stunt organic growth—and you corrected them? Wouldn’t that be enough to propel you to the front of the line?

You already know that organic growth makes for a stronger company. It just makes sense to grow from within by developing outstanding products and services that win over new customers and keep current ones coming back. The alternatives are to grow via debt financing or an army of flush-with-cash buyers on a spending spree—and clearly, neither is easy to come by these days. The problem is, your competitors are playing by the same rules. But you can outwit them simply by putting a halt to the mistakes you (and they) are making right now.

Mistakes? What did we do? How can we fix it? As I explain in my book, New Product Blueprinting: The Handbook for B2B Organic Growth (AIM Press, 2008), some of the largest B2B companies in the world have been halted by their inability to develop new products that customers want to buy. They experienced a “fuzzy front end” of product development. They were committing the deadly sins that stunt organic growth.

Sin No. 1: Imagining customers’ needs in your conference rooms

Does your new product process begin with the word “idea,” perhaps with a light bulb next to it? So whose idea is it—yours or your customers? Unfortunately, most suppliers start with their solution, “validate” it by showing it to some customers, and measure market needs by watching sales results… after the product launch.

Invert this process: Begin with customer needs and end with supplier solutions. While doing things in the wrong order may “feel” better to you, it is far less likely to result in sales and customer satisfaction. Besides, intelligent B2B customers can detect your “validation” a mile away. They correctly sense you are more interested in your idea than in them… and that doesn’t do much for the long-term relationships you need to build.

Sin No. 2: Relying on sales reps to capture customer needs

A salesperson is unlikely to uncover a full set of market needs if he is rewarded for near-term selling, unable to reach true decision makers, or not calling on most of the customers in your target market segment. But put a good salesperson on a team with marketing and technical colleagues, train all in advanced B2B interviewing methods, and you’ll run circles around your competitors.

Be wary of voice-of-the-customer (VOC) consultants who want to exclude your sales force from interviews because “they can sell but not listen." In the long run, your company will fall behind competitors that have taken steps to develop a team of engaged and enlightened salespeople.

Sin No. 3: Counting on just a few VOC experts

Some companies rely on a handful of internal VOC experts to interview customers. You’ll do far better training a critical mass of employees—who routinely interact with customers—to gather customer needs. Keep your VOC experts as coaches and trainers, but implement “VOC for the masses.” You’ll overwhelm competitors by turning a trickle of customer feedback into a torrent.

Sin No. 4: Using hand-me-down consumer goods methods

Traditional VOC methods rely on questionnaires, tape recorders, and post-interview analyses. That’s fine for consumer goods, but your B2B customers are insightful, rational, interested, and fewer in number. They’re smart and will make you smarter if you engage them in a peer-to-peer dialogue. Use a digital projector, let them lead you to their areas of interest, probe with skill, and you’ll be shocked at how much you’ll learn.

Sin No. 5: Gathering only qualitative customer feedback

I once had a new client who came to me extremely frustrated. He had spent months interviewing customers, only to hear his boss say, “Nah, I don’t think they want that; they want this.” Unfortunately, interviewers often hear want they want to hear… and then parade some customer quotes for support.

What you need is quantitative data, which measure customer importance and satisfaction on key outcomes. Skip quantification and your new product will be based on assumptions, bias, and wishful thinking.

Sin No. 6: Listening only to immediate customers

Unlike business-to-customer (B2C) producers, your product might be part of your customers’ products, your customers’ customers’ products, and so on. It’s a mistake to interview only your direct customers, because they are usually unable or unwilling to disclose downstream customers’ deepest needs. Also, B2C producers assign “one vote” per consumer… while you need to weight the buying power and value chain position of downstream customers.

Sin No. 7: Ignoring competitors when you design your product

I find most product development processes are far too casual—and late—in assessing competitive offerings. Your new product makes a lot of money only if two conditions are satisfied:

Condition A. It offers significant value to customers.

Condition B.  Customers cannot get this value elsewhere.

 

Interviews tell you only about Condition A. You need side-by-side testing to learn about Condition B. This allows you to attack competitive weak spots, avoid getting blind-sided, and optimize pricing.

 

So why is it so important to focus so intensely upon customer needs? Consider three points:

The average new product success rate is only one in four. More than 30 years of research says the number one reason is inadequate market understanding.

The “how” continues to get easier than the “what.” You have twin goals of understanding what your customers want, and then how to satisfy them with your solutions. In these days of open innovation and global access to technology, the “how” is easier than it’s ever been… if you have a solid grasp of the “what.”

You reap benefits beyond good product design when you use respectful peer-to-peer interviews. You engage customers in the design process, which primes them to buy your product later. Customers will enjoy benefits well before product launch. Their interviews cast them as caring, competent suppliers, so they have a better shot at other near-term business.

 

Never forget that relationship building is everything. Understanding your customers’ deepest needs is a competitive advantage you should learn—not outsource. We’re living in an age where anyone, anywhere on the globe, at any time can start a business that competes with yours. By engaging customers in a respectful peer-to-peer dialogue and genuinely soliciting their ideas, you position yourself as a valuable partner and not just a vendor—and that, in and of itself, is a reason to stick with you.

Download free chapters of the book New Product Blueprinting: The Handbook for B2B Organic Growth and learn more about this process by visiting www.newproductblueprinting.com.

Discuss

About The Author

Dan Adams’s picture

Dan Adams

Dan Adams, president of Advanced Industrial Marketing Inc. (AIM), has more than 30 years experience in Fortune 500 marketing, business development, strategic planning, working within and with major B2B corporations. He is an award-winning speaker and conducts workshops globally to train commercial and technical teams in advanced B2B product development, and provide post-workshop coaching support. He is the author of New Product Blueprinting: The Handbook for B2B Organic Growth (AIM Press, 2008), which has several chapters you can download at no cost, and Adams is listed in the National Inventors Hall of Fame.

Comments

Dan Adams' Article

Superb, insightful, and "inciteful."

This should get some interesting conversations going.

All the best,

Bill Corcoran
Mission: Saving lives, pain, assets, and careers through thoughtful inquiry.
Motto: If you want safety, peace, or justice, then work for competency, integrity, and transparency.

W. R. Corcoran, Ph.D., P.E.
Nuclear Safety Review Concepts Corp.