Why is it easier to innovate in B2C than in B2B?
You have a great B2B innovation idea and you are tempted to make it more concrete? Read this article first.
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| Photo credit: nyoin / Foter / CC BY-NC-ND |
In B2B you have to innovate for multiple levels:
When you build an innovate product or a service for the consumer, you target a specific segmentation and you do your best to satisfy that segmentation. When you build an innovative product or a service for a company it is much more complex because your innovation has to satisfy the decision makers (which are usually composed of different people with different objectives) but also satisfy the employees that will use the product or/and the customer of your customer. For instance, if your product provides wonderful KPIs for the management but make the employees work more complicated, it will have much less chance to succeed. It may be a great product for the head of Sales but if it is overpriced, the head of Finance may refuse it. It may be the product the Sales always needed but if the security is not perfect, it may be rejected by the head of IT. And it may improve the performance of the companies that buy it but the final customer may be unhappy with the impact on him. To make the sales cycle easier it is highly beneficial to identify and work with influencers/change agents within the company, people who will 'champion' your organisation/products/services but that is a topic for another article.
In B2B it is harder to sell:
The decision process of the consumer is very fast. He will like or not your innovative product and if he likes it and if he is satisfied by the price, he will buy it without any long delay.
In B2B markets, the decision process is very long, and even longer if you target big corporations. You sometimes have to wait months before you can sell your product to companies. This is definitely a problem - especially for startups but also for big corporations, because investors expect a fast return on investment on the new product.
In addition it is much easier to find leads in B2C markets than in B2B markets. In B2B you need to reach the decision makers, usually the top level positions of companies. And the top level is generally very hard to contact.
In addition it is much easier to find leads in B2C markets than in B2B markets. In B2B you need to reach the decision makers, usually the top level positions of companies. And the top level is generally very hard to contact.
In B2B, there is no place for Nice to Have products:
You can sell a "nice to have" innovative product to a consumer. Companies buy only products they really need.
B2B companies are usually followers:
When launching innovative products, it is fundamental to find your early birds. They are the first customers that will try and buy your products and then talk about it. They will be the ones that will make your product more famous and then successful. In B2C markets, it is much easier to find early birds that want to try your products. You can go in to the street and talk about your idea, go on multiple social networks and promote your product and you can easily convince your direct network in to trying it.
Companies are usually followers. A product becomes a need when the competitors have it. So driving adoption in B2B market will definitely take more time than in B2C because of the long sales cycle.
B2B after sales requirements are "heavy":
If you want to innovate in B2B you definitely have to think this through properly. The best example is in technology. If you sell software to a consumer, it is very easy to just propose online support. In B2B markets, especially if you start targeting big corporations, you need to propose very efficient customer service and support which represents a big budget you need to consider.
In B2C, consumers are not in a real position to call for additional features or corrections on your product. They take it as it is and propose some ideas but they don't expect a fast implementation. In B2B, big corporations will not hesitate to put pressure on you if they discover after the sale that there is a missing feature in the product.
Enhancements are not easy to implement:
This mainly concerns technological innovations: in B2C, when you enhance your products, you don't necessarily need to take in to consideration the impacts on your existing customers. Take the example of Apple: every time they update their iOS, the old Iphones start to be really slow. At the beginning you will hear people complaining about it but at the end most of the unhappy customers will end up buying the newest version of the Iphone.
In B2B markets, it is far more complex. Any enhancement you do should not have a big impact your existing customers.
B2B customers are more "dangerous" than B2C customers:
In both cases it is not pleasant to have an unhappy customer. However an unhappy customer in the B2B market will hurt you much more than an unhappy consumer. Companies within the same industry usually talk with each other so any issue with your product could spread like wildfire.
B2B companies are usually followers:
When launching innovative products, it is fundamental to find your early birds. They are the first customers that will try and buy your products and then talk about it. They will be the ones that will make your product more famous and then successful. In B2C markets, it is much easier to find early birds that want to try your products. You can go in to the street and talk about your idea, go on multiple social networks and promote your product and you can easily convince your direct network in to trying it.
Companies are usually followers. A product becomes a need when the competitors have it. So driving adoption in B2B market will definitely take more time than in B2C because of the long sales cycle.
B2B after sales requirements are "heavy":
If you want to innovate in B2B you definitely have to think this through properly. The best example is in technology. If you sell software to a consumer, it is very easy to just propose online support. In B2B markets, especially if you start targeting big corporations, you need to propose very efficient customer service and support which represents a big budget you need to consider.
In B2C, consumers are not in a real position to call for additional features or corrections on your product. They take it as it is and propose some ideas but they don't expect a fast implementation. In B2B, big corporations will not hesitate to put pressure on you if they discover after the sale that there is a missing feature in the product.
Enhancements are not easy to implement:
This mainly concerns technological innovations: in B2C, when you enhance your products, you don't necessarily need to take in to consideration the impacts on your existing customers. Take the example of Apple: every time they update their iOS, the old Iphones start to be really slow. At the beginning you will hear people complaining about it but at the end most of the unhappy customers will end up buying the newest version of the Iphone.
In B2B markets, it is far more complex. Any enhancement you do should not have a big impact your existing customers.
B2B customers are more "dangerous" than B2C customers:
In both cases it is not pleasant to have an unhappy customer. However an unhappy customer in the B2B market will hurt you much more than an unhappy consumer. Companies within the same industry usually talk with each other so any issue with your product could spread like wildfire.
This is not an exhaustive list but they are the most obvious challenges I have identified so far in my experiences with those two markets.
I will be the first to tell you that if you have a great idea do not hesitate to try it. However, if you never had experience in working in a B2B business, you need to know those elements and be aware that selling a B2B innovative product is not a easy mission. I don't mean to give you a negative perception of innovation in B2B but to give you a realistic view so you can think about it and address those challenges in your startup product and implementation.
I will be the first to tell you that if you have a great idea do not hesitate to try it. However, if you never had experience in working in a B2B business, you need to know those elements and be aware that selling a B2B innovative product is not a easy mission. I don't mean to give you a negative perception of innovation in B2B but to give you a realistic view so you can think about it and address those challenges in your startup product and implementation.
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