The author and founder of Advanced Industrial Marketing
Inc says that addressing customer needs, clarifying the
‘fuzzy front end’ of the process, and producing differentiated new products is the road to success
Written by Kevin Doyle
As the global economy experiences a cataclysmic freefall sure to re-define how the world does its business once financial order is restored, Dan Adams offers an approach designed to allow B2B companies to grow and thrive as they move forward.
Adams is founder of Advanced Industrial Marketing, Inc (AIM), a company devoted to providing B2B suppliers with the tools and skills necessary to enhance new product development. He contends companies can accomplish this only through organic growth – the growth rate a company achieves by increasing output and enhancing sales, exclusive of profit or growth associated with takeovers, acquisitions or mergers.
Adams holds a BS in Chemical Engineering and an MBA in Finance from The University of Akron. Married with three daughters and two grandchildren, he is given to the use of colloquialisms delivered in the unassuming, disarming cadence of the Midwest. He spent more than 25 years in a variety of positions in the corporate sector, including a lengthy stint as the head of Strategic Planning for BF Goodrich Specialty Chemicals.
“I’d been trying some things to improve organic growth and front-end product development. I learned a lot about what did work by first finding out what didn’t. At any rate, some things started working quite nicely and near the end of my tenure in corporate America, I said ‘I think this is going to work for some other companies,’” Adams says.
“The whole intent is organic growth. For most companies, that means developing new products and new services. You have to provide significant value for the customer and you have to be able to differentiate and give them something they can’t get anywhere else,” he continues.
Once Adams defined his strategies and refined his approaches, he wrote New Product Blueprinting: The Handbook for B2B Organic Growth, which was published in June 2008. The advice book stands on its own but also allows clients to study and grasp Adams’ concepts in advance of taking part in his workshops and serves as a reference tool moving forward.
“We really felt that over a few years we had come up with some practices that were pretty revolutionary. When you add up all the small changes we had made, it’s really quite dramatic from anything that’s out there. We wanted to mark our territory, so to speak,” Adams says. “The book took about a year and a half to write. It was quite a slog and pretty painful, but we’re getting some very, very good feedback.”
Defining the blueprint
Adams says it took him “a while to sort this rascal out” but eventually determined that B2Bs often make the mistake of applying techniques and methods designed for retail sales to their customers, severely diminishing their options when dealing with both existing and potential clients. He often cites the inherent differences of selling a garden hose to a retail customer as opposed to selling a hydraulic hose to an industrial buyer
.
“Workday Joe thinks about hose durability, fluid specifications, and pressure ratings. Weekend Joe might choose Hose A over Hose B because it’s purple and his wife’s favorite color,” Adams says. The hydraulic hose buyer will be held accountable for that purchase and will base his decision on an entirely different set of criteria than the buyer of the garden hose. Additionally, potential buyers of the hydraulic hose might total a few dozen while the target audience for a garden hose could be in the millions.
Adams says companies can start down the road to differentiation by applying the seven steps of New Product Blueprinting, excerpted from the book as follows:
Market Research: Beautiful product development in an ugly market segment makes no sense, so sift your potential opportunities early and cheaply. You do this with internet-based market research, combined with simple but effective screening tools.
Discovery Interviews: Technical-commercial teams interview customers using qualitative techniques to uncover needs in depth. You enter the customer’s world to discover and understand what will excite him.
Preference Interviews: In a second round of interviews, you quantitatively prioritize customer needs that are most important and least satisfied. You replace your internal bias with hard data and kill your project if customers aren’t eager for change.
Side-by-Side Testing: You compare existing products you may have with your competitors’ best. This baseline helps you attack their weak spots, avoid getting blind-sided, and optimize pricing – possible only when you understand all of your customers’ options.
Product Objectives: You now have a wealth of outside-in customer and competitive data. Your project team uses this data to create a blockbuster product design in which specific customer needs are targeted and market reaction predicted.
Technical Brainstorming: You’ve got the “what” (your product design), but now consider the “how”, or preliminary paths to pursue. This brainstorming includes technical solutions that come from outside as well as inside your company.
Business Case: Would a venture capitalist fund your project? Twelve points must be addressed in every Blueprinting project. This drives out assumptions, bias, omission and wishful thinking before you begin heavy spending in the product development stage.
All of this is designed to clarify that “fuzzy front end” – how to distinguish your product from the competition – that most often confounds the most savvy business leaders though they recognize it as a crucial element for success. Businesses unable to consistently develop the products customers want simply wither and disappear from the market landscape.
Changing the conversation
Success, Adams says, depends on the type of leadership at a given company.
“The ones who focus on the immediate and say that every quarter is the most important in the history of the company, well, they don’t call or write,” Adams says with a chuckle. “The builders, who are all about making their companies great, create products that offer value and are not mimicked quickly by the competition.”
Identifying best practices and eliminating sub-optimal procedures is a critical piece of the puzzle. “Once I help them understand the difference of a B2B versus a B2C, I haven’t lost a single RFP (request for proposal),” he says.
Adams says companies should treat customers with respect, eliminate outdated procedures such as elaborate questionnaires and taped conversations, and, most importantly, ask direct questions seeking customer input. “If they feel like they’re Jane Goodall’s chimps, you’re not going to get the same richness as you do from a direct conversation,” he says.
“People are kind of lost as to what it is their customers want. I ask them what their product development looks like and they say it starts with an idea. So I ask, ‘Is it your idea as a supplier or is it the customer’s idea?’ Invariably, it’s almost always the supplier’s idea. Then I ask ‘When do you really know that you’re meeting the customer’s needs?’ If I press the conversation, the answer I hear most often is when the customer launches the product and we see how many units they sell,” he explains.
“So, I continue by asking ‘You start with the supplier solution and end with the customer’s needs? Doesn’t that seem backwards to you? What if we inverted this to start with the customer’s needs and then came up with a supplier solution?’ The point is, we focus on the front end with some very new methods of understanding what the customer wants,” Adams says.
“We provide the framework but, at the end of the day implementation has to be an inside job and there has to be accountability by the leader. He or she has to tell employees that a certain part of your job over the next year will be to learn and implement new skills that will put you ahead of your competition,” Adams says. “Unless somebody grabs the matter of implementation by the scruff of the neck and gets serious about it, then nothing gets done.”
Spreading the word
Adams says the vast majority of AIM’s business is generated via word-of-mouth referrals. Though he’s typically “very careful about not divulging names,” a page on the company website is full of testimonials from satisfied clients, including Dow Chemical, Sherwin Williams and Illinois Toolworks.
“My customers and clients, especially if they’re back in the value chain of a product, will do our interviews with their customers and their customers say ‘This is cool, a supplier who is actually listening.’ Our client builds their credibility, their customer will ask ‘How did you know how do that and ask those questions’ and, when they find out, then they call us,” Adams says.
Asked if he is attempting to re-invent the way B2Bs conduct their business, or simply throwing them a lifeline in turbulent times, Adams didn’t hesitate.
“It’s the former, no question. We want to re-invent the way they do business with their customers, the way they innovate and the way they grow. That’s what we’re all about. When you think about the function of a B2B, they’re ultimately supported by understanding what the customer wants and then delivering that value in a way nobody else can at the best price,” Adams says. ¬