The worlds of B2B customers are less known but more knowable than B2C, yielding a large customer insight gap that can be closed for competitive advantage.

Every aspect of new product design must consider the customer characteristics of The B2B Advantage

1. B2B vs. B2C Differences

When it comes to new product development, does it make a difference if your company makes products for other businesses (B2B) vs. end consumers (B2C)? Conventional wisdom doesn’t see a difference. Go to a conference on innovation and you’ll see industrial and consumer goods producers sitting side by side, taking the same notes. Similarly, very few books and consultants provide much help on how B2B and B2C suppliers should customize their innovation approach accordingly. 

Compared to B2C suppliers, B2B suppliers find their customers’ worlds are 1) less known, and 2) more knowable. Let’s begin with the first point. You may have heard someone say, “But didn’t Steve Jobs say he never asked customers what they wanted… because they couldn’t tell him?” Yes, but he also said that several hundred Apple engineers couldn’t wait to launch iTunes… because they wanted it for themselves: “I mean, the first few hundred customers were us.” They were developing consumer products, and since they were already living in their customers’ world, they had the insight they needed.

2. B2B customer worlds are less known

This brings us to one of the disadvantages B2B suppliers have relative to their B2C counterparts: They don’t live in their customers’ worlds. B2B customers live in foreign worlds that require diligent exploration. B2B suppliers might hire someone from their customer base, but these insights immediately begin fading as customers evolve. It’s common for B2B suppliers to think they understand the needs of long-time customers. But these suppliers are often surprised when they begin using rigorous B2B VOC (voice-of-customer) methods. They usually learn they had a) completely overlooked some important, unmet needs, b) overestimated customer desire for other needs, and/or c) underestimated eagerness for yet others.

B2C suppliers might follow Apple’s path and forego consumer research… or they might conduct rigorous consumer research, as Proctor and Gamble does. But woe to the B2B supplier trying to bring value to a world it doesn’t understand. Whether it stems from arrogance or ignorance, such innovation malpractice leads to squandered resources, missed opportunities, and underwhelming offerings.

3. B2B customer worlds are more knowable

While the worlds of B2B customers may not be well-known, they are knowable. Imagine you work for a company that manufactures hose… both garden hose sold to home-owners, and hydraulic hose sold to producers of earth-moving equipment, e.g. Caterpillar. It’s easier and more fruitful to understand the needs of a B2B customer like Caterpillar due to five customer characteristics, collectively referred to as The B2B Advantage:

1. Knowledge: The Caterpillar engineer’s knowledge far exceeds the homeowners, due to years of education, on-the-job training, and many hours of focused work effort each week.

2. Interest: Because your product could have a large economic impact on Caterpillar, you might make the engineer a hero. In contrast, you’ll need to pay a homeowner to join your focus group.

3. Objectivity: Compared to end-consumers manipulated by Madison Avenue, B2B customers are rational because a) multiple decision-makers are often involved, b) procedures must be followed, and c) accountability follows decisions.

4. Predictability: Most B2B customers are in business to make money, so their decisions are economically grounded. This means their decision-making can be analyzed and predicted.

5. Concentration: Many B2B markets are concentrated. While there may be millions of potential B2C buyers, there are often just tens, hundreds or perhaps thousands of possible B2B buyers.

So what? If B2B customers are knowledgeable, they are able to help the supplier design a better product. If they are interested, they are willing to do so. If they are objective, their decision-making is understandable and stable over time. If they are predictable, new product designs can be created with confidence. If they are fewer in number, they can be more easily reached and influenced.

4. Customer insight gap

Notice how this “unknown-but-knowable” paradox yields a competitive opportunity for your company. For the B2C supplier, the gap between typical customer insight and potential customer insight is relatively small. For the average B2B supplier, the difference—the customer insight gap—is enormous: Most B2B suppliers know much, much less about their customers’ needs than they could if they capitalized on the five characteristics of The B2B Advantage.

Of course an advantage is only an advantage of a company takes advantage of it. When a company is designing a new product for customers in a target market, they should carefully consider all five characteristics defining these customers. Every aspect of the B2B supplier’s interaction with customers in the front end of innovation should be sculpted around the nature of B2B customers. This is the cornerstone of the New Product Blueprinting process.

New Product Blueprinting Video Tour #3, The B2B Advantage

e-Learning Module 3: The B2B Advantage

New Product Blueprinting: The Handbook for B2B Organic Growth Pages 11-20

Q1. Do all B2B customers exhibit these five characteristics… knowledge, interest, objectivity, predictability, and concentration?

No. Imagine a supplier makes a paper stapler that is purchased by an office worker. Technically, this is a B2B transaction, yet they don’t exhibit these five characteristics very strongly.

Q2. Since New Product Blueprinting is designed for B2B, is it inappropriate for B2C?

In some cases New Product Blueprinting can be used by B2C suppliers. Imagine a consumer purchasing a home solar power unit one day and a new sports jacket the next. In the former case, their B2B-like behavior could allow Blueprinting Discovery interviews to be used in a consumer focus group.