Category Archives: B2B Strategic Marketing

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