In our research, B2B professionals rated a strong value proposition as the #1 most important driver of profitable, sustainable organic growth. But what makes it strong? Certainly not the supplier’s opinion. A value proposition is only strong if it addresses outcome(s) important and unsatisfied to the customer. This is the part that most B2B new-product teams bungle. They guess, hope, or hypothesize which outcomes customers want. Big mistake. Without unbiased, unfiltered data, most teams are led astray by their confirmation bias.
More in video, Leader’s Guide to B2B Organic Growth series, Video Lesson #19
For years we’ve advised new product development teams to write a Business Case… to request moving their project into the development stage. But now we often suggest they use a simpler Market Case for their smaller projects. The Business Case has 12 sections while the Market Case has but 6. But the Market Case has the most important section… “Value Proposition”… in which solid evidence of customer needs is presented (usually in the form of Market Satisfaction Gaps).
Download Sample Market Case (after Step 3)
Imagine you’re a long-distance runner and some spectators in the stands have side-bets on how you’ll do this lap. Would you pay attention to them? Would you increase your pace just to make them happy… and lose the race as a result? This is precisely what you do when you pursue quarterly results “at all costs.” Remember, Wall Street analysts don’t give a fig about your company’s long-term well-being. That’s your job.
More in article, B2B Organic Growth: Moving to earned growth
Research published in Harvard Business Review showed companies exhibiting long-term behavior have higher revenue, earnings, job creation, and market capitalization. Clearly, the key to shareholder wealth is long-term behavior, not short-term. If you’re at a financial review discussing revenue, price and margins, you are engaged in a spectator sport. What if your meetings three years ago focused on developing blockbuster products? That was a participant sport, because your longer time horizon allowed you to impact future financial performance. Not just talk about it.
More in video, Leader’s Guide to B2B Organic Growth series, Video Lesson #7
Do you want to think only about your next move, or think five moves ahead? Here’s a 5th order plan to maximize shareholder wealth: 1st Order: Develop superior customer insight capabilities. 2nd Order: Understand market needs better than competitors. 3rd Order: Develop high-value products focused only on these needs. 4th Order: Sustain superior growth from these products. 5th Order: Impress shareholders with your proven growth track.
More in article, Stop Stifling B2B Organic Growth with 2nd Order Effects
Every business leader becomes known for something. You might be a remodeler, always “fixing the place up.” Improving productivity or quality is helpful, but nothing new is created. Others are decorators, trying to boost “curb appeal” every quarter. Yet others are realtors, focused on M&A, not organic growth. Your company was founded by builders. Be the builder focused on delivering value to customers, so your business grows… and your employees enjoy stable, rewarding careers.
More in video, Leader’s Guide to B2B Organic Growth series, Video Lesson #2
Exhibit A is an attractive market and Exhibit B is a documented need within this market. Most companies do OK with Exhibit A… identifying a market segment that is winnable and worth winning. But most are terrible at Exhibit B. This is being sure of which customer outcomes (desired end-results) companies will be rewarded for satisfying with a new product. Increasingly, companies are using Market Satisfaction Gaps to do this. (See 12 case stories)
More in white paper, Market Satisfaction Gaps
There are two types of unearned growth: 1) Inherited Growth comes from great products your employees created long ago, and 2) Market Growth is driven by your customers’ growth. You influence neither today. Earned Growth occurs when you surpass competitors in meeting customer needs. Normal accounting doesn’t separate earned from unearned, but you should. You may be living on borrowed time, when you should be the master of your own destiny.
More in article, B2B Organic Growth: Moving to earned growth
In the early 1900’s the French colonial government tried to decrease the Hanoi rat population by rewarding bounties on each rat tail turned in. The second-order effects were 1) lots of tail-less rats roaming the streets, and 2) rat-breeding farms for tail harvesting. When your business leaders slash R&D spending, invoke travel bans, cut marketing staff, and delay hiring… what second-order effects will come as a result? Perhaps slower future growth? Rats.
More in article, Stop Stifling B2B Organic Growth with 2nd Order Effects
Here is our #1 recommendation for innovation success: Don’t start development stage work without quantitative evidence of customer needs. You can use Preference interviews followed by Market Satisfaction Gaps… or some other unfiltered, unbiased evidence. Two tips: 1) Don’t do this for very small projects, just those requiring 1+ person-year of development. 2) Don’t do this for technology development. Just product development, where you’ve targeted a specific market segment.
More in article, Market Satisfaction Gaps… your key to B2B organic growth
