Is Your B2B Market Research Half-Baked?

If it does not include a quantitative measure of market needs, it is.

Marc Benevento

Industrial Market Insight

First, the good news: if you include voice of customer research in your front-end market research, you are on the right path. Capturing the voice of customer (VoC) is the most reliable way to identify unmet market needs.

Now, the bad news: if your VoC research does not include both qualitative and quantitative methods, it is half-baked. Just as batter is not a cake, a half-baked marketing process does not lead to successful new products and services. Without both qualitative and quantitative portions of VoC, there is no way to be sure that you are focused on the most significant unmet market needs.

Frequently, B2B companies engage in qualitative market research informally through customer meetings and sales calls. They then develop products or services based on what they heard and hope the market will want this product when they launch it a year or two later. These products are designed based on a myopic view of the market based on current products and customers, rather than a comprehensive view of market needs. The result is disappointment when new product sales fail to meet expectations.

Adding some structure to VoC processes can help. Research by the AIM Institute shows that nearly 90% of respondents felt that use of “Discovery interviews” – a structured process to uncover desired customer outcomes – resulted in a deeper understanding of customer needs as well as yielding information that was more valuable and unexpected compared to informal processes[i].

Better interviewing techniques are only half of the equation. Without an unbiased, quantitative measure of desired customer outcomes, it is impossible to be certain your project is focused on significant unmet needs. The quantitative portion of market research enables companies to distinguish market needs from wants, which is critical to success in B2B. Defining a project properly prior to development, which includes distinguishing between “wants” and “needs” can make B2B projects three times more likely to be successful[ii]. With this information in-hand, why would companies skip this critical step?

Industrial new product success — Factors affecting industrial new product success rate

Companies omit the qualitative step of market research for a variety of reasons, including:

A belief that they have heard the same things repeatedly, so they already know what is important to customers
Pressure to accelerate the timeline and begin developing a product or service immediately
Lack of a process or budget for quantifying customer needs

Many B2B companies, industrials in particular, work in highly concentrated markets and spend a lot of time talking with customers and fall into the trap of thinking this is sufficient research. Without a formal VoC process, important desired outcomes can be missed. It is also common for customers to talk about issues that are urgent, but not important in the grand scheme of things. If an effort to quantify desired outcomes is not taken, companies often find new products aimed at the wrong set of outcomes.

Time is another reason companies fail to conduct both steps of VoC research. Every company wants to accelerate organic growth efforts, and one drawback of VoC is that it can take 4-6 months to organize, schedule, and conduct qualitative interviews, and another 2-3 months to capture and analyze quantitative data. Product development can then take 6-12 months, if not longer. In the spirit of “failing fast” companies often decide to skip the quantitative step to trim a few months off the development cycle. The team spends a year developing a product that the market doesn’t need, and, ironically, failure comes much more slowly than intended. The time spent on qualitative analysis not only improves the chances of success by a factor of 2-3 but can also accelerate development by focusing the team on exactly what is needed, informing trade-off decisions, and eliminating unnecessary features.

Finally, many industrial companies do not have a dedicated marketing process or function to execute these steps. New Product Blueprinting™ is a best-in-class tool for VoC in B2B markets that includes qualitative methods and quantitative analysis, while integrating easily into existing product development frameworks. If you lack the tools, resources, or expertise to execute comprehensive VoC projects, Industrial Market Insight can work with your team to complete projects at a B2B-friendly budget. Schedule a call with Industrial Market Insight to learn how to prevent half-baked market research and improve sales, margins, and time-to-market of new products.

[i] “Guessing at Customer Needs”, Dan Adams, The AIM Institute

[ii] Winning at New Products, Robert G Cooper

Focus on Value Proposition for Winning B2B Innovation Plans

Do your product innovation plans fail to get the support of management? When presenting organic growth opportunities, do you spend more time debating your new product sales forecasts and customer adoption rates than explaining the idea itself? Focusing on value proposition will result in winning B2B innovation plans.

A common trap new product teams fall into is focusing on HOW MUCH of the product you will sell rather than WHY the product will sell. Too often, business plans for new industrial products focus on the sales forecast and ROI while spending very little time discussing why anyone might buy your product in the first place.

A solution is to demonstrate, with data, that your new product or service solves an important problem for B2B customers and to show how it is the best solution compared to direct and indirect competitors. Once your audience is convinced your product creates value by solving customer problems better than alternatives, the sales forecast becomes a much easier discussion.

How can you do this? The best way is to engage potential buyers of your B2B products to identify pain points qualitatively and follow up with a quantitative assessment to separate the “wants” from the “needs”. The quantitative step, which is frequently non-existent or omitted from industrial marketing, is critical in determining which pain points should be addressed to create value that B2B customers will pay for. The unmet needs that are identified are used as the centerpiece of the value proposition.

When building a business case, make the value proposition — not the sales forecast — the centerpiece of the plan. A well-crafted value proposition conveys the benefits a product provides customers and illustrates why they should buy from you. Once you have convinced your audience that there is a target customer who has a demonstrated need for the product, the sales forecast becomes much easier to believe.

Industrial Market Insight can show your teams how to develop strong value propositions that lead to products that exceed expectations. We offer programs, tools, and resources developed specifically for manufacturers and distributors of industrial products.

Marc Benevento is the founder and managing director of Industrial Market Insight, a consultancy focused on the needs of manufacturing companies seeking performance improvements and organic growth. Industrial Market Insight has tools and resources to help uncover and market needs and translate them into new business opportunities. More information can be found at www.industrial-market-insight.com or by email: info@industrial-market-insight.com

Focus for Faster Innovation

By Marc Benevento

Industrial Market Insight

Do you want to get new products to market faster? Who doesn’t? However, innovation and new product development often take longer than expected, leading to depressed new product sales, excessive resource consumption, and a diminished bottom line. Having a clear understanding of the benefits sought by target customers and their relative significance — their “wants” versus “needs” — allows product development teams to eliminate superfluous features, focus on what is important to customers, and accelerate progress.

Although there many causes of product development delays, some of the more common lack of clear performance targets for development teams and attempts to add too many features into the product. Without clear development targets, teams don’t know when the product is “done” so they continue tinkering with it to make it just a little be better before releasing it for sale.

By adding too many features, the development becomes more complicated, and it is unclear how trade-offs of features should be prioritized. For example, does your material need to be tougher or stronger? How much of either will make a difference the customer is willing to pay for?

These are not only issues on “big” projects. In fact, these problems tend to plague your entire product development portfolio because it is thought the effort to clearly identify customer needs isn’t required for small projects. This is a myth that needs to be busted. Even small projects need to address a significant customer need and have a strong value proposition in order to be successful.

Now for some good news: both of these issues can be tackled by taking time to obtain a quantified measure of customer needs as you develop the value proposition for your new product.

By obtaining a quantitative understanding of what is most important for customers to achieve, decisions of how to prioritize features – and which can be eliminated – become crystal clear. Fewer features means less complexity and faster product development.

Once you’ve decided on the features that customer value most, you can dial in to exactly how much change needs to be made to keep customers completely satisfied. In this way, you will know when you’ve done enough to make a measurable difference that they are wiling to pay for. Industrial Market Insight uses processes such as New Product Blueprinting to identify and quantify desired customer outcomes that will accelerate your product development and increase new product sales.

Industrial Market Insight can help you identify and prioritize unmet customer needs, leading to products that exceed expectations. We have programs, tools, and resources developed specifically for manufacturers and distributors of industrial products.

Marc Benevento

President

Industrial Market Insight

Disrupt Your Customer Relationships to Spark Innovation

Marc Benevento

Industrial Market Insight

Too often, industrial manufacturers fail to identify emerging customer needs because the same people have the same, stale conversations with customers. Because new products and services will be in demand only if they solve significant customer problems, the ability to bring fresh perspective to conversations with customers is critical to new product success in the B2B world. There are a few simple things companies can do to disrupt the customer relationship and uncover unmet needs that lead to successful new products.

1. Gather multiple viewpoints

Although there is likely to be a primary sponsor at a customer for your new product or service, the introduction of the product into manufacturing or operations will very likely impact many other functions, each of which may have veto power. Failing to identify and capture the needs of these functions may result in immediate rejection of a new product. For example, I have watched products approved by R&D and purchasing be refused by manufacturing groups because they were not compatible with the existing manufacturing infrastructure. Prevent this by disrupting your customer relationship and seeking perspectives from the many functional areas that will interact with your product or service. Talk to prospects as well as existing customers to understand why some companies elect to buy from the competition.

2. Stop selling. Ask questions and listen

It may seem obvious, but when interviewing customers, make sure the customer is doing the talking. The functions that interact with customers most often, sales and technical service, are comprised of professionals trained to know their customers, conduct troubleshooting, and sell existing products. When probing for unmet needs, the goal is to do the exact opposite, which is to ask questions and listen. On many occasions, I’ve been accompanied by a salesperson who could not resist the urge to end an awkward silence and answer questions on behalf of a customer, costing us a learning opportunity. Disrupt the customer relationship by suspending selling and problem solving, and allowing the customer to talk about their manufacturing or operational challenges. If the customer isn’t doing the majority of the talking during the meeting, your company isn’t learning about new opportunities.

3. Bring a fresh perspective

Sales and technical service personnel are required to be extremely knowledgeable about their customers, and are often reluctant to ask questions they feel have obvious answers. It can therefore be difficult for people very familiar with an account to probe for customer needs. Questions cannot be answered if they are never asked. To avoid this trap, disrupt the customer relationship by bringing in a person less familiar with the account to conduct the interview. This can be a member of your central marketing group who is less familiar with the customer, or an outside resource. Newcomers have license to ask simple questions. I have seen this pay dividends on multiple occasions, where senior sales, technology, and marketing personnel have been surprised to learn about fundamental shifts to customer operations they had assumed to be stagnant. Bringing a new voice to the conversation ensures it will be fresh to both the customer and interviewers, which will often take the conversation to new, fruitful, places.

In order to be successful with new products and services, disrupt the customer relationship to uncover unmet market needs. Central marketing staff or outside marketing resources can be great assets to change the dynamics of existing customer relationships. Bringing a new perspective will help reveal problems to be solved… the emerging and unmet customer needs, the spark that ignites innovation in products and services.

Do Your New Product Sales Measure Up?

By Marc Benevento
Industrial Market Insight

Are sales of your new industrial products falling short of expectations? A probable cause is a value proposition that has not been well developed and validated with customer input.

Too often, product development for industrials such as chemicals, resins, or adhesives often starts with an idea for a product, with little or no effort being made to understand if the problem that is being solved is significant to customers or if other solutions exist. B2B customers will pay only for the best solutions to significant problems.

To develop products and services that targeted customers need, start by identifying problems that are important to them. Use tools that allow you to quantify and prioritize unmet customer needs, and then focus on the most urgent unmet needs you are able to address.

As you develop your new product or service, be sure to benchmark against direct and indirect competition to be sure you offer real and differentiated value to customers. B2B customers make purchase decisions based on economic value.

Industrial Market Insight can show your teams how to develop strong value propositions leading to products that exceed expectations. We have programs, tools, and resources developed specifically for manufacturers and distributors of industrial products.

Learn more about the common problems B2B companies encounter with value proposition development.