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
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While in Asia, I heard a great expression, “Before You Can Multiply, You Must First Learn to Divide.” I now find myself using this saying nearly every day.
The idea is that if you want to grow your business, you must learn to partner with others – and give them a slice. This means you take a smaller slice of a bigger pie.
I have been doing this for a while now with my agent. He takes a percentage of my business in exchange for handling everything from negotiating, contracting, logistics, travel, invoicing, etc. I am convinced I make more money through this arrangement…and work less.
I recently had a conversation with a guy who runs a seminar business. When big name American speakers come to his country, he hosts a public seminar. His biggest challenge is getting butts in seats. When I looked at his business model, it was flawed. He has a lot of fixed costs, like advertising, printing (brochures) and postage. His customer acquisition cost is ridiculously high, and was often hit or miss. He could spend $5,000 on a newspaper advertisement and get only three customers paying $300 each. Even with 50 paying customers, he is still paying a 33% customer acquisition cost – assuming no discounts. My suggestion was to create a model where others make money only when he makes money. One example is to set up an affiliate program where he gives a large commission to people who get him paying customers. This moves his costs from fixed to variable. This removes his risk while encouraging others to take a vested interest in his success.
Yesterday I was at a board meeting for my local National Speakers Association chapter (I was the President last year and am still on the board). Over the last two years we spent a lot of time and money on something we call the “Visibility Initiative.” The idea was to get visibility for our members in order to help them get more gigs. We spent thousands on website development and marketing. If we use the “divide before multiply” concept, it would make more sense to get someone to do all of these activities for us. Speakers bureaus sell speakers to event planners. They already have the connections and already have websites. This is their business. Therefore, if we partner with a bureau (or two), they get their commission for every gig booked and we get greater results with less effort.
When I was on the Donny Deutsch show, a caller asked, “I am the owner of a business. How do I retain my top talent?” Donny asked what percentage of the business he owned. The caller said 100%. Donny’s response was (paraphrasing), “Wrong. As of today you own 80%. Go into the office of your top 10 people and tell them that they are now partners in the business. Give them 2% each. They will have a greater sense of ownership. Besides, this is probably the amount you would have given them as a bonus anyway.”
Where can you multiply by first dividing? Where can you give a slice of your business to someone else? How can you grow your business while creating more income for others?
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Last night I was on “The Big Idea with Donny Deutsch” on CNBC. I was there to discuss how to save your job during a down economy. I had a number of tips prepared, but due to limited time, I was only able to give 2.
Here are my 7 “big ideas” for saving your job or creating a new job.
1. BE LAZY – Most people spend 60% – 75% of their time work on activities that do NOT create value for the business. Don’t! Be lazy and stop doing what you don’t need to do. Rethink all of your work and focus on the important activities. You’ll make yourself more valuable to the company and you will work less.
2. SEEK OUT OVERSEAS OPPORTUNITIES – Given the weak dollar, US products and services are bargains in other countries. Volunteer for an ex-pat job. Take on a sales job overseas. I will be spending more time overseas this year than I had over the previous 6 years combined.
3. ACT LIKE AN OWNER OF THE BUSINESS – If you think like the CEO rather than (fill in your job here), you will think more strategically. You will make smarter business decisions. Instead of just focusing on “what” you do, ask yourself “why” are you doing it. This will certainly impress your boss.
4. USE PERSONAL CONTACT RATHER THAN EMAIL – Deciding who to layoff is often more emotional than logical. Therefore, it is critical that you maintain a personal relationship with fellow employees and bosses. Email is impersonal. To help you break the habit, take my 30 day challenge.
5. PLAN FOR YOUR PINK SLIP – Assume that you will eventually lose your job or choose to leave. Therefore, be sure to build your resume, build your brand, and build your network of contacts outside of the company. Your career is your responsibility.
6. SOLVE PAINS – During tight economic times, people are more willing to invest in products/services that eliminate pains. Problem solvers are in big demand…always. My speeches on recession proofing businesses are more popular than those focused on innovation.
7. CHARGE MORE – Oscar Wilde once said, “A cynic knows the cost of everything and the value of nothing.” People equate value with price. Charge more and you will be valued more. Reducing prices makes you a commodity. Increasing prices makes you a luxury. Luxury items tend to do better in tough economic times.
P.S. If you want to see the complete list of 10 tips I had prepared for the show, go to the CNBC website. They also republished my article on “6 Ways Innovation Can Recession-Proof Your Business.” You can also check out the complete list of guests from the show.
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Just in case you don’t already have enough to read….
Here are two lists with hundreds of great blogs you should consider reading. My website has been selected for both, so I am slighly biased…
There is one thing I realized early in my speaking career: being a great speaker does not mean you will necessarily have a great speaking business.
This past weekend I gave a presentation on how to have a great speaking business. Although my tips were targeted at speaking professionals, they are relevant to anyone in any business.
Over the next week, I will share several tips from that speech. Today’s concept is on how to identify your target audience.
From my experience, there are two questions you need to ask in order to determine your target market/audience:
- What pain do you relieve?
- Who has this pain AND who has the money to eliminate it?
What’s the pain you relieve?
I speak on innovation and creativity. Although these are buzzwords in the industry, they are not necessarily an easy sell. However, if you focus on the problem it solves, it feels more relevant. For example…
- Competing in a commodity market (de-commoditizing commodities)
- Eliminating internal blocks to business growth
- Recession proofing your business
Organizations are more apt to want innovation when it is the antidote to a pain rather than a grand aspiration. People are more likely to buy your product or service if it addresses a specific need.
The next challenge is to find out who has the money to eliminate this pain.
Find the money
My innovation services have a clear buyer: large corporations. These organizations typically have some money to solve their pain – if it is important.
But what if you are a speaker on financial planner or nutrition? Although these may be of value to individuals, they are probably not of direct value to corporations. You could try to get corporations to hire you (or use your product) as an employee benefit. But since you won’t be contributing to the bottom line of the organization, the sale will be more difficult.
What are your other options?
As a speaker on these topics, you can either hold public seminars, but that is a lot of work.
Maybe a better solution is to find associations where individuals with this need/pain gather. These can be trade associations, non-profits, or event multi-level marketing organizations.
One PR firm I know has a somewhat unique model. They connect “for profit” enterprises with non-profits who use (and can potentially) recommend their products. For example, a medical device manufacturer might connect with nursing trade association. Or a technology manufacturer could connect with an association of freelance “geeks.” There are associations of all kinds out there.
These symbiotic relationships can help both parties achieve their goals. They can make it easier for you to access your target audience. It might give you greater credibility. And you can help the associations add value to their members.
If you can articulate the pain you solve and then find where these people gather, you may find greater leverage in your marketing initiatives.
I will continue these tips in future blog entries.
Last night I attended an event where three presenters shared examples of how “New Media” has become a powerful marketing tool. Here are my three favorites.
The best video series award goes to the “Will It Blend” videos. Done as a viral marketing campaign, Blendtec, a small blender manufacturer, developed dozens of 90 second videos. What do they do? They put random objects, like marbles or glowsticks, in their blender. They are hilarious and they definitely convince you these blenders will pulverize anything. What I particularly like is that these videos are developed on the cheap. Click the video above to see them blend an iPhone.
The best “spoof” award goes to the “rap” videos developed by Smirnoff Raw Tea.
The best use of New Media award goes to the “Stay Smart” campaign by Holiday Inn Express (done by Digitas). My favorite piece is the “See what the candidates could’ve saved by staying at Holiday Inn Express.” They went through the public records of hotel expenditure of each Presidential candidate during their campaign and then estimated how much they could have saved had they stayed in a Holiday Inn Express. This campaign was timely, funny, and created a splash. Even Mike Huckabee was asked about his hotel expenditures on Fox & Friends. You can’t buy that kind of publicity!
Although I rarely write about politics, the current Presidential campaigns are giving us some interesting examples of psychological manipulation.
For example, this morning’s newspaper’s headline was, “(Obama) says Clinton’s attacks paved way for her big night.” It is believed that Hillary’s negative campaign helped her win key states.
Why does mudslinging work? Why do people use it so much?
I believe it is because of two important forces:
People play it safe when it comes to increasing gains: Obama’s platform is about change. Although people claim they want change, in reality (as I wrote in another blog entry), most play it safe when it comes to increasing gains. The status quo wins out most of the time. If change is to prevail, people need a clear picture of the future AND they must believe that that future is achievable. Although Obama is inspiring, he has been criticized for not providing a clear and consistent vision of the future and for lacking a compelling roadmap for getting there. Then again, I’m not sure any candidate has done a good job at this.
People will take risks to minimize their losses: When the feasibility the “gain/change” comes into question, people start focusing on their fears. Hillary has been playing this card consistently. She has challenged Obama’s know-how and suggested that everything will go wrong if we vote in an inexperienced President. As an example, she focused in on Obama’s apparently “two-faced” position on the North American Free Trade Agreement (NAFTA). Voters began to wonder, “Change is good, but is it worth the risk?”
What would I advise Obama and Clinton to do differently?
Stop the mudslinging. Although these negative campaigns may help the individual candidates during the primaries, it will only bolster support for McCain, the de facto Republican candidate. They may win the battle but lose the war in November.
Meet people where they are. As reported in that earlier blog entry, in an obese society, most people will choose “lose your gut fast” over “get six pack abs.” It’s hard for people to envision a Utopian world that seems so far away from the current state of affairs. If you want people to change, three things must be in place:
- People must be uncomfortable with the current situation.
- They must see a better future.
- They must believe that that better future is achievable with a reasonable amount of “investment.”
Point #3 is probably the most important (and overlooked) part of the process. This leads to the last recommendation.
Create a clear, compelling roadmap for the future. Whatever you stand for, make sure you communicate HOW you will get there. Be consistent and stay focused. And don’t shoot for the moon. The candidates can talk about grand aspirations. But they should emphasize smaller, more immediate steps that feel like they can be implemented. A believable future is as important as a desirable future.
These are valuable lessons that can be applied to any professional or personal situation. Organizations should watch the political world to learn more about human behavior and motivation. It is a great public experiment on a large scale.
P.S. I say this with tongue in cheek…but the Obama vs Clinton campaign feels like the Mac vs PC debate. Obama has the cool, trendy and wildly popular feel of a Mac. Clinton has the history of being an active First Lady (with Bill) and yet is less warm and fuzzy. Maybe Obama’s campaign should create a viral Mac vs PC spoof for YouTube. Or maybe one already exists.
My previous entry focused on innovation as a way of helping you stand out in a crowd. I also discussed how wearing a bathrobe at a black tie event can have the same effect.
In my Goal-Free Living book, I interviewed a successful entrepreneur (and now a good friend), Mikki Williams. Mikki is the master at standing out in a crowd. But it is not a tactic; it just comes naturally. Here is a brief excerpt from the book.
I met Mikki Williams in her apartment high above Lake Michigan in Chicago. The first thing I noticed upon walking into her place was that she collected lips. Lots of lips. This is a hobby she started more than 20 years ago, which has permeated her home and work, including a five-foot lip couch (see photo) and assorted other lip accessories—from toilet seats to artwork.
The next thing I noticed when walking into Mikki’s place was Mikki. She had big hair. Really big hair. Mikki is someone who lives by the motto, Carpe diem! She joked, “I want to be thoroughly used up when I die. My ultimate goal will be realized when the check to the undertaker—bounces!”
“I like to say, ‘Be outrageous, it’s the only place that’s not crowded.’ That’s the way I live my life. I dress outrageously and have crazy hair. But it’s not that I try to be this way. This is who I am. I am just being me.”
Eventually, Mikki took her life experiences onto the public speaking circuit. But Mikki was not your typical speaker. She looked like Bette Midler and definitely stood out in a crowd. One day she received a call from a Wall Street Journal reporter who was doing an article on the speaking industry during the recession.
“Why me?” she asked the journalist. “Because you stand out. You look different.”
When the article was published, Mikki’s face was featured on the front page! This launched her speaking career.
Too often, we try to fit in with the crowd. We play it safe. But innovation is about taking risks while being true to you. This takes confidence. And it takes the belief that your “style” is what the world needs and wants. Yes, taking this risk may help you stand out. More importantly, it may be the ticket to your success.
When you think of great leaders, what traits come to mind? Honest? Competent? Inspirational? Courageous? Fair? Looks like a leader?
Although that last one is typically not found on lists of leadership characteristics, looks may be related to one’s leadership style.
In an interesting article published in The Economist, researchers found that students could determine a person’s leadership traits just by looking at a photograph of them. Here are some excerpts (please note that British spellings have been retained):
Dr Ambady and Mr Rule showed 100 undergraduates the faces of the chief executives of the top 25 and the bottom 25 companies in the Fortune 1,000 list. Half the students were asked how good they thought the person they were looking at would be at leading a company and half were asked to rate five personality traits on the basis of the photograph. These traits were competence, dominance, likeability, facial maturity (in other words, did the individual have an adult-looking face or a baby-face) and trustworthiness.
The results of their study…show that both the students’ assessments of the leadership potential of the bosses and their ratings for the traits of competence, dominance and facial maturity were significantly related to a company’s profits.
Sadly, the characteristics of likeability and trustworthiness appear to have no link to company profits, suggesting that when it comes to business success, being warm and fuzzy does not matter much (though these traits are not harmful).
Be sure to read the entire Economist article. The article provides some fascinating insights into our perceptions of leaders and the qualities of good leaders.
This morning I was having a conversation with an aspiring speaker. He asked my thoughts on the best ways to further his career.
My response was, “Join a mastermind group.” What is a mastermind group? It is a group of people who get together and work on each other’s business (or personal lives). The concept was developed by Napoleon Hill in his book, “Think and Grow Rich.” The purpose is to “multiply an individual’s brain power and continually motivate positive emotions.”
I am in a few mastermind groups and have been in many others in the past.
Let me give you some interesting ways in which you can run your mastermind sessions. Unless noted otherwise, assume your mastermind group is four to six people who meet on a somewhat regular basis (once a month or once a quarter).
Accountability Model – I am in one group that is organized like this. Each person has 45 to 60 minutes to present their status report to the group, focusing on progress and obstacles. It is more of a conversation, with others jumping in with thoughts and ideas. At the end of the day, each individual declares what they want to achieve before the group meets again. This format is good for holding others accountable for results. Unfortunately, there is less time for creativity and problem solving. To speed things up, status reports can be sent via email in advance of the meeting.
Problem Solving Model – This is my favorite model. When it is your turn, you have 60 to 90 minutes to present a problem you are facing and get feedback/creative solutions from the others. For example, the latest version of my website is a result of such a mastermind group. I printed off copies of my home page and asked for feedback. One person said, “I like the unconventional thinking concept, but there is nothing unconventional about your homepage text. What are some provocative thoughts?” As a result I fleshed out my 10 unconventional thoughts and turned them into a flash header. My most recent session was feedback on a new product I am developing. The feedback you get is incredible. The key is to solve an issue that is of importance to you. And if you can’t think of a problem/opportunity, the group can help you find one. This is a highly creative and focused mastermind model.
Book Club Model – Prior to getting together, every member in the group reads/listens to the same article, book, CD/MP3 that descriptions a useful tool that can be applied to your business. For example, one time when we met, we all read the same article on copywriting for websites. We then applied the article’s concepts to our respective businesses. Because everyone is working on the same problem (e.g., creating an elevator pitch), you learn a lot about your business even when you are helping others.
Theme Model – This model works better with a larger group (e.g., a dozen people). You choose a theme for the meeting (e.g., technology or sales). Each person comes prepared to give a 15 minute presentation on their best practices for the selected theme. Each person is encouraged to bring a handout. A dozen people can present in approximate 3 hours. When you leave, you have 11 handouts with great ideas. And as you are not working on each other’s businesses, different people can attend each time. This model is a fantastic way to get lots of tips in a short period of time. I learned more about technology during a 3 hour mastermind than I had in the previous year. And it didn’t cost me a penny.
Micro-Model – This is a variation of the “Problem Solving Model,” where each person brings a problem/opportunity they want to work on. But this time there are only two people who participate. The dynamic is very different when it is one-on-one. It is more focused. If you are paired with the right person, you can get even more done in a shorter period of time. Plus, you are working on your business half of the meeting. You can work also with different people each time. I really like this model and use it on an ad hoc basis as often as possible.
There are many other models too. Colleagues I know have mastermind groups comprised of four people from different geographic areas. Once a quarter they meet in a “neutral” location for a weekend. Friday night is socializing and catching up. Then on Saturday they work on two businesses, and another two on Sunday. This is a very intense model.
You can meet via phone. You can discuss via email or online bulletin board. You can meet weekly or monthly, quarterly, or on an ad hoc basis. There are no rules. I prefer face-to-face meetings once every 6 to 8 weeks with email exchanges in between.
Who should you have in your mastermind group? That’s up to you. I have two groups where everyone is a professional speaker. This has the advantage of our sharing specific ideas that work for our industry. I have another mastermind group where no one else is a professional speaker; the others are a trainer, a consultant, and a marketing guru. The advantage here is getting ideas from other industries.
One critical point is that each person must be at the same “level” relatively speaking. You don’t want anyone who is a drain on the group because they can only ask for advice but can never give it. You also don’t want a situation where someone does not receive personal value because they are constantly giving. Regardless, you want a commitment from everyone to go to all (or at least most) of the meetings. Slackers should be ditched as they will bring down the energy of the entire group.
Play around with it. Find what works for you. But just do it. The value you will gain is immeasurable. It may even save you thousands of dollars that you might otherwise spend on coaches or mentors. For me, my mastermind groups augment, not replace, the experts I hire.
Do you have a mastermind group? What have you found that works?