B2B Innovation Curve

In my previous article on the “innovation bell curve,” I introduced the new bi-modal innovation curve.  Yesterday I gave a speech for Babson College MBA students.  One of the attendees asked how this bell curve worked for the B2B environment (versus B2C).

Great question – and a harder one to answer.  The reason it is harder is the psychology behind the buying decision.

I wrote about B2B versus B2C innovation a while back.

B2C purchases are made for both functional and emotional reasons.  Functionally, a Lexus is similar to a Toyota.  But there is an emotional component that makes the former more appealing.  People often don’t just buy transportation, they also buy comfort, status, peer pressure and other less tangible attributes.

B2B purchases are made for primarily functional reasons.  At the end of the day, the main purpose of a B2B purchase is to solve a particular business need. Yes, there are examples of B2B companies on the right-hand side of the bell curve.  But quite often, these are luxury B2C brands that insist on high-quality, branded materials.  In this case, the B2B provider is an extension of the B2C brand.

B2B companies, for the most part, play in the left-hand side of the bi-modal curve.  Buyers of B2B products/services want:

• Someone who is easy to do business with
• High quality – they want it right, and they want it right now
• Cost is always a factor

Or, as Dr. Michael Hammer (the father of Business Reengineering) used to say, “People want it fast, right, cheap and easy.”

Yes, there are emotional reasons why B2B purchases are made.  Back in the 1980’s, executives used to joke that you would never get fired for buying “Big Blue” (IBM) computers. It’s not that IBM was the best, but you knew they would not screw up.  If you bought a computer from someone else and things didn’t work out, you might lose your job.  But you were always safe buying the more expensive IBM boxes.

But even this emotional decision resides in the left-side of the curve. It is the emotional connection to the value you are getting that is at play.  Value in the B2B world is defined a bit differently.  That’s all.

Innovation Survey

My good friend, Chuck Frey, at innovationtools.com is conducting a quick survey to determine the state of innovation.  It is only 5 questions long. Please contribute 5 minutes of your time to help us better understand how innovators are coping with today’s dire economy.

Take the survey here.

Thanks.

Special Goal-Free Living Offer

I recently sent a copy of my Goal-Free Living book to someone I worked with 20 years ago. I hadn’t seen or heard from him since the late 80’s. The wonders of social networks reconnected us after all of this time. After reading the book, he wrote the following…

The time is right for your message. A lot of people have to reflect on where they are, and where they are going. It helps to know the difference between a goal and an aspiration. In an earlier message to you I said that I consider myself goal-oriented. Thinking about your points, however, I guess I am more like a river person. I have aspirations, and they lead me to some really unexpected but very satisfying destinations. Like you say: it is important to seek out adventure.

Since becoming unemployed in December, I have had a number of chance meetings and interesting ideas. One led to a volunteer project resulting in a very successful fund-raising event. Another is an invention that I am working to patent. Two other ideas are being developed into business plans, with prospective backers for one of them already. That might lead to something else entirely. I don’t know where I’ll be or what I’ll be doing in six months. That’s kind of scary, but I am optimistic that it will be good, so I am also very excited.

Today’s crisis is causing people a lot of pain and concern.  Financial security is eroding.  Job security is vanishing.  As a result, “happiness” seems to be at an all time low.

Call me crazy, but I strongly believe that my Goal-Free Living book can help people increase their level of satisfaction immediately. It can give them hope in a seemingly hopeless situation.

Therefore I am offering my book for only $8.95 postage paid. Although I lose money on every copy I sell, I want to get this into the hands of as many people as possible.

Please note the following restrictions:

• I can only offer this to US addresses (books will be shipped via media mail)
• You must be prepared to wait up to 4 weeks for delivery.  If you want faster delivery, you can buy the book from Amazon.com for $18.21.
• There are only 250 copies available at this price.

I hope you will take advantage of this offer and give the gift of hope to someone you care about.

The New Innovation Bell Curve

The old model of innovation is dead…and a new model has emerged.

For months now, I have been writing about the Innovation Bell Curve.  If you read between the lines, you quickly realize that it is no longer a bell curve but rather more of a bimodal distribution.

Therefore I have re-drawn my frequently used graphic and replaced it with the new innovation bell curve.

The Value Brands are rapidly improving their quality to the point where they are displacing mid-market brands.  And, with the tough economic times, mid-market buyers are seeking greater value and shifting to the left, exacerbating this impact.  Premium Brands remain differentiated (albeit sometimes niched) and always appeal to high-end, more sophisticated consumers.  As the recession lingers on, these premium brands now offer lower cost versions of their products, further squishing the mid-market.

If you have not done so, please read all of my articles on the Innovation Bell Curve.

Is Your Career Doomed? Mine Might Be.

I spend most of my days thinking about the “innovation bell curve.”  The concept is simple, yet profound.

Budget brands will continue to prosper as mid-market consumers move left to save money.

Although premium brands may suffer slightly, there will still be strong demand for high-end products and services.

It is the middle of the bell curve, the “mid-market brands” that are getting squished as consumers move toward greater value and premium brands reposition themselves (a bit more) toward the mid-market customer.

I’ve been thinking about this model as it relates to my career – giving speeches about innovation

On the right-hand side of this model are the “celebrity” speakers.  These individuals include Harvard Business School Professors (e.g., Clayton Christensen), former CEOs of big companies (e.g., Jack Welch), and major best-selling authors (e.g., Seth Godin).  These individuals charge MUCH more than I do.  But they are also a draw.  For large events, having one of the speakers on the platform will get butts in seats.

On the left-hand side of this model are the “vendor” speakers.  These individuals work for large companies who view speaking as great marketing.  These speakers are often not only free, sometimes they even pay sponsorship dollars to be on the platform.  VPs of Innovation for large consulting firms or presidents of innovation software vendors fall into this category.  They have something to sell the audience.

Where does this leave me?  It certainly leaves me rethinking my business model.  Then again, I am always rethinking my business model.

I am continuing to put more energy into books and products like Innovation Personality Poker®.  These move me towards the left-hand side of the model.  You can take me home for a fraction of the cost of one of my speeches.

I am also staying focused on the corporate market (rather than large conferences) because there is still great demand here.  With group sizes of 50 – 300, celebrity speakers are prohibitively expensive.  And given the small event size, the marketing opportunity is not as great for vendor speakers.  My business continues to boom in this area.

Finally, I am shooting the pilot for my TV show in April.  If all goes well, I may be able to re-position myself in the right-hand side of the chart – a celebrity speaker.  But of course, time will tell.

Where are you positioned?  Who is squishing you out of business?  How can you reposition yourself?

P.S. In a previous blog entry, when discussing the innovation bell curve, I talked about the wisdom of Mr. Miyagi in the Karate Kid.  He talks about those in the middle getting “squished like grape.”  I thought you might like to see the YouTube video…

[youtube]http://www.youtube.com/watch?v=3PycZtfns_U[/youtube]

Next Page »