Why B2B Technology markets makes switching too easy

Don’t try to hold B2B Technology Client hostage

B2B Technology markets can make switching by the customer too easy. Existing or legacy technology can become too cumbersome to use . Or refuses to realize its promise after trying for years. The client, in despair, becomes willing to try a new supplier. That supplier is willing to transfer the legacy system.

The solution is not to become sticky by merely embedding your technology in the customer’s processes. Or make the customer a hostage to your technology. Instead, it’s useful to think of what we learnt in the industrial B2B era as we continue to compete in the knowledge economy. But first some background.

Buy Class and Server based B2B Technology

A key in B2B markets is the idea of “Buy Class” also called “Buy Task”. Think back to the industrial era. Imagine you produce a product through an assembly line (cars) or process (chemicals). You need to have production machines. Operators are trained on those machines. The machines need a whole lot of additional support like forklift trucks, spare part stores, maintenance folks that run the steam, forced air utilities etc. A quality control department needs to have quality control checks designed around every step of the process. Thus it’s hard to be a new supplier and replace existing machines for the manufacturing B2B customer. The manufacturing customer would go for a rebuy and buy the next model when the machine needs replacement.The machine manufacturer would be able to train the people on any innovations on the prior platform and machine. There are long term B2B relationships from the CEO down to the machine operator in place. There would be no need for a whole lot of people and process changes.

In contrast, B2B Technology systems are about making things easier after the adoption of the system. Wholehearted adoption by every user is a key in B2B technology success for the client. In the early days of Enterprise Resource Planning (ERP) companies swore by SAP compared to other ERP systems. Implementing SAP was another matter. Users joked that the full form of SAP was “Slow And Painful.” Investment traders shorted the stock of the customer company because it would take several years for the benefits to reach the bottom line. Once the ERP was implemented though, things improved dramatically as all internal data became much more visible.

Fast forward to the SAAS model of B2B technology

Fast forward to the SAAS (Software as a Service) model of B2B technology. In-house servers were out and everything was on the cloud. But being on the cloud does not make you user friendly. An entrenched player does not seem to have much of an advantage either.

Microsoft was inside every company . Yet Microsoft owned Skype did not make any headway in the pandemic. Zoom did. In education technology Blackboard was already inside Universities. They had introduced Learning Management Systems (LMS) first with servers and then on the cloud. Blackboard was hard to use but we believe they had the resources to completely redesign their product and simply replace the old product. They had University B2B relationships and had got Professors to learn the pretty difficult system who in turn persuaded students to learn it. And then a much better user experience in Ed tech happened with Canvas. Recent analysis by EdScoop suggests that Canvas has overtaken Blackboard.

Since user experience is so important everyone in technology is trying to make their product easier to use. But there is a critical difference between B2B and B2C technology marketing.

The critical difference between B2C and B2B technology marketing

There is a critical difference between B2C and B2B technology marketing. LinkedIn, Twitter,Facebook have a B2C face where you sign up as an individual (B2C). Yes they would like you to post and engage several times a day. But large segments of B2C users are generally passive. This works in a business model sense of push advertising to an audience like TV programs with varying viewership.

Advertising happens at the edge of the client organization but as soon as your B2B technology is embedded into the organization that involves any business process from accounting, finance, supply chain, inventory, human resources to marketing and customer service it’s useful to extend some established industrial ideas in B2B marketing.

Thinking for a way forward for B2B Technology
Enhance customer support and listen

Don’t have the ex-factory mindset from manufacturing. Ex-factory mindset works when there are no competitors. Recall Henry Ford’s famous quote on the Model T: “Any customer can have a car painted any color that he wants, so long as it is black.” The logic is that the product is so valuable that you take it and I don’t want to know what you do with it.

A similar mindset exists in B2B technology vendors. Some of the biggest names have practically no customer support. Many start-ups have the customer success function and that seems to be a step in the right direction.

Since the pandemic, global 24 hour customer service is excellent and affordable. Train and incentivize your operators to gather and report insights that users share so freely. Don’t zone out! The feedback is free and signals many pain points of the actual users of your B2B technology.

Avoid Feature Fatigue: Build New ?

As explained in the S Curves of innovation , the dilemma to keep adding new features (bells and whistles) to an existing product is very real and continues to the digital age. No sooner than a couple of customers or even prospects mention a feature that the product development teams start working. The reality is that features can lead to feature fatigue. Assess if the new feature will only matter to the advanced user. New features do not necessarily mean much to prospective customers.

It’s more important to have a vision for outstanding value to the client and stick to it. Just keep checking for feedback on how well the value is being realized at the customer end. Great B2B marketers of industrial products have always been interested in their customers beyond just getting paid. They keep a close watch on the final individual customer’s behavior and preferences as they change rapidly.

Closely watch the final individual customer’s behavior

For all B2B is ultimately paid for by individual customers. And customers can change rapidly. Two examples:

Learning Management Systems (LMS) : The student is the ultimate user of LMS. And today’s student is used to Instagram and TikTok. While current LMS’s do not approach the user friendly nature of giant social media companies – there is significant improvement. Working with a completely clean slate on product, based on all the market knowledge from current customers, would be a good and inexpensive approach.

Electric Cars vs Hybrid: Toyota Prius started the hybrid can in 1997. Over the next 25 years Toyota has been perfecting the hybrid car even as oil prices declined. Electric cars, including Tesla, were just not taking off without “environmental” government credits. But now Hybrid cars seem like Blackberry. No one wants to punch keys. Thus all automakers are planning to go all electric. Some automakers had the resources to do this years ago. Why they stayed in the old “S Curve” is intriguing.

If a large enough segment of consumers seem to be shifting and some start-up businesses have started a lower S curve- don’t ignore it. Put resources behind that lower S-Curve early on. Your current customer relationships are strong enough to trial it out.

To summarize: If you are a B2B Technology supplier don’t believe that you can have your customer hostage. Instead take a keen interest in the customer’s business and customer outcomes. Isn’t that the reason that your B2B technology launched in the first place?

About StratoServe.

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