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Awkward Reality #66

Avoid the commodity death spiral at all costs.

66 Commodity Death Spiral

Imagine your business stopped innovating, your profits declined, and it is now budgeting time. To salvage next year, you’ll likely cut long-term costs, e.g. R&D or marketing, further reducing your ability to create high-value products. Next year, you’ll have even fewer options. This results in death or irrelevancy. If you’ve started this spiral, pull out quickly.

More in article, The Commodity Death Spiral (Originally published in B2B Organic Growth Newsletter).

Awkward Reality #65

Don’t like what’s coming out of your extruder? Better check what’s going into your feed hopper.

65 Extruder Hopper

Most financial business reviews are like standing around the output die, exhorting the extruder to do better. But nobody’s checking the feed hopper. It looks like an intelligent meeting, discussing gross margins, price increases and growth rates. But these were predetermined years earlier, largely by your new products, what you put into the feed hopper.

More in article, Are You a Builder or a Decorator?

Awkward Reality #64

Awkward Reality #63

Awkward Reality #62

A customer outcome is like a scientific specimen, waiting to be examined and understood.

62 Scientific Specimen

Great value propositions begin and end with customer outcomes. It’s like collecting specimens, sliding them under your microscope, and continuing to turn up the magnification. The careful researcher doesn’t have to agonize over the right value proposition. It comes into increasing focus, waving its arms and screaming to be addressed.

More in white paper, Timing is Everything (page 9).

Awkward Reality #61

Pinching pennies in the front-end of innovation is like night-driving with burnt-out headlights.

61 Penny Pinching

Imagine a team spent $50,000 traveling to interview customers about their needs. What would it take to recover this front-end investment? Typically, just one of these… Improve probability of success by 1%, increase market share by ½ share point, accelerate time-to-market by one month, or raise pricing by 0.5%. Buy new headlights and speed up.

More in article, The Harsh Realities of Organic Growth (Originally published in B2B Organic Growth Newsletter).

Awkward Reality #60

You have two options: Ask for pricing decisions, or understand customers’ pricing decision making.

60 Price Decision Making

You can ask for pricing decisions using a survey, e.g. Van Westendorp. But it’s hard to get a straight answer in concentrated B2B markets: They know they’ll be negotiating prices later. Better to understand the customer’s world so well you can create a value calculator… to model their pricing decision-making. You’ll have longer-lasting insights vs. a one-time survey.

More in article, Pricing New vs. Existing Products (Originally published in B2B Organic Growth Newsletter).