Why Your Corporate Champion & Your Customer May Be Different Parties
"Nobody gets fired for buying IBM" was the business mantra of a previous generation, and while the phrase may sound dated the precept is still very much the rule and not the exception.
For any innovator in a B2B channel, commercial validation (or business validation) will make or break you. Selling your product or service at a gross profit in a quantifiable market is a milestone that opens funding rounds and draws in more customers. This can be equally true for technology licensing. But most businesses are still hesitant to sign on to something new for a number of reasons:
-Your product or service is not in its final form and will need to be refined or further derisked -Your ability to scale to meet demand -Your company's ability to survive in the long term
Yes, you may have a breakthrough innovation that creates value for your customer, but the risk/reward analysis doesn't come out in your favor.
Enter the corporate champion.
What every innovator hopes for is an evangelist somewhere inside a large organization you are selling to that can help navigate the procurement process and promote your vision. But even this may not be enough to overcome perceived risk. Your B2B product, service, or technology sits somewhere in a supply/service chain and while your customer may only see modest gains it can be a game changer for the end user and/or OEM.
Tier 2 suppliers in the automotive industry sell to tier 1 suppliers (who in turn supply OEMs like GM and Ford). While some innovation comes from tier 1 suppliers, tier 2 suppliers operate in other verticals (consumer electronics, aerospace, etc.) and adapt the newest technology to automotive. While these innovations may be of little interest to tier 1 suppliers, it is of the highest interest to OEMs to integrate the best technology into new and existing models. Next generation sensors, displays, and processors are in automobiles because the OEM made it so, yet the OEM does not purchase them directly.
This is also true in the semiconductor industry. A small, fabless chip designer may have a breakthrough product in a niche application that may be of little interest to an integration customer but highly important to an OEM like Apple or Samsung.
In cases like these and many others the decision to buy your product, service, or technology may be made by someone other than your customer. Your corporate champion and your customer may be different parties and while this paradigm can be ubiquitous and even self-evident, marketing solutions may not be.
Marketing to the end user or anyone other than your customer can consume valuable resources and provide no measurable feedback, analytics, or defined outcomes. This can also alienate your customer if they feel they are being forced to buy from you and while good diplomacy can help mitigate this you need to evaluate your position and develop an executable strategic plan:
-Landscape your entire business ecosystem: understand the basic business models, metrics, and relationships between all the actors in your space. -Mapping and understanding process flow: this is typically done for internal business processes but can be adapted to understand how a product or service is created and delivered from its elemental components. -Model your innovation into the marketplace: analyze impact at both a product/service level and at a company level. BOM benchmarking, contribution margin, and market share are all related and you need to be able to articulate your narrative to everyone in the value chain. -Upstream/downstream competitive analysis: you're likelier to find your champion in a competitive space with high consolidation. Desire for market share and paranoia about what the other side is doing drives faster adoption of innovation. Effective duopolies like Boeing/Airbus, AMD/Intel, or MasterCard/Visa battle it out in corporate Thunderdome until one man leaves. This can be used to advantage. -Market segmentation: once you've identified your outside champion remember to craft the message to them. You may not be selling directly to them but they are still buying from you indirectly and you need to make a compelling business case that may not look anything like the one you present to your direct customer.
In the broadest sense, this all describes B2B pull marketing. However, layering in innovation risk increases complexity at every step. Clayton Christensen once said "Disruptive technology should be framed as a marketing challenge, not a technological one." This type of analysis may extend beyond the internal resources of a startup and may not warrant the expense of a Big Three consulting firm. We are here to fill the gap and provide innovators with solutions, please feel free to connect anytime to discuss.