B2B vs B2C Innovation

August 19, 2008  

I just had a conversation with a consulting firm that specializes in B2C innovation. Now they are being asked to do some B2B innovation. They asked me, “What’s the difference between innovation in a B2B and a B2C environment?”

Although in many respects, the innovation efforts are similar, there are quite a few differences which are worth noting. Yes, B2B can invest in collaborative product development and other more sophisticated methods/technologies. However, in this entry, I want to focus on the “softer” and less quantifiable differences between them. These mainly have to do with what your customers really want. Business buyers have different motivations than consumers.

Businesses Want You to Improve Their Business
Quite often, businesses buy from you because they want you to improve their business. You can reduce their costs, improve their effectiveness, or increase their business in some way. This requires a different mindset when studying customer needs. Although focus groups and discussion boards may be helpful in designing a new toothbrush, they are not as practical in a B2B environment. Instead, you need to observe their business. Back when I was a leader in Accenture’s business process reengineering practice, I discovered something interesting.  The most valuable use of reengineering is not to improve your processes, but rather to improve your customer’s processes. Observe your customers. Map their processes. See how your products/service can improve their business. And don’t forget to reengineer the interface between your business and your customer’s business.  As Michael Hammer (the father of Business Reengineering) used to say, “Make yourself ETDBW – Easy To Do Business With.” (the graphic above shows the three levels of process improvement)

Businesses Want You to Help Them Provide Better Product/Service to Their Customers
Another reason businesses buy from you is that they believe that what you offer will help them provide a better product/service to their customers. Therefore, in order to determine what to offer, it would be ideal if you could observe your customer interacting with their customer. If you are in, let’s say, the building supplies business, you might be able to watch your customer work on a construction project. But this level of observation is not always practical. Sometimes you need to get creative. You could hire an independent third party to do the observing. You could – with your client’s permission – survey their customers. Or you go straight to the marketplace and use more traditional tools to understand the types of customers your customers serve. The bottom line is, don’t just think about your customer; think about the end customer.

After writing this entry, I searched for other perspectives on this topic. I found an interesting discussion thread started by copywriter Bob Bly. He asked if there was a difference between B2B and B2C from a marketing perspective. I’ll let you read the conversation and you can make up your own mind. 

In a future blog entry, I’ll write about an interesting business model: B2B2C.

Leave a Reply