Monetising innovation: why it pays to put your customers on your team
Shouting about innovation won’t get you sales. Rather, B2B marketers must define and demonstrate their ‘value proposition’: their new products’ true value to customers. The trick is to engage with those customers from the outset…
Taking the time to create a value proposition, at the earliest possible stage in development, enables you to determine what the real worth of your innovation is, and indicates how – and to whom – the concept should be marketed.
The following steps should be enough for any company, large or small, to determine whether its newest concept is likely to sell – or sit on the shelf.
1. Describe what, as a result of using your product, the prospect might improve (e.g., productivity, efficiency, revenues, safety, time to market); what they might reduce (e.g., costs, staff turnover); and what they might create (for instance, satisfaction, new services).
2. Project how much this improvement would be worth in terms of, say, revenues, cash- or time-savings.
3. Talk to your prospective users about what they’ll be able to do differently as a user of your product – painting a picture of the advantages they’ll enjoy in their specific job roles.
The role of company buyers, for example, is to determine needs, shortlist suppliers, order, pay for and take delivery of products. So the value to the them should focus on speed of delivery, service, and so on.
Product-users, by contrast, are looking for an outcome: the ability to do a job that they haven’t previously been able to do, or to perform existing tasks more efficiently. So this latter group is focused on performance.
Whomever you are targeting, strive to get them to agree on the measurable benefits – savings, productivity, etc. – that the product will afford them. Then ask them what they’d expect to pay for the product, as a percentage of that value.
Talking value in this way lets you set the agenda – enabling you and the customer to jointly agree the product’s real value and encouraging the customer to set the price.
If it then transpires that you can’t produce your product for a sum that the customer is willing to pay, you’ll have saved yourself many months’ development headaches – not to mention, the pain of trying to sell a product for which there is no market.
At the very least, communicating your outline value proposition – and showing how you arrived at the worth of your solution – will create curiosity in the mind of the customer: they will want to know if it really will apply in their own situation, and they may even work with you to develop the best solution.
Common sense you say? Well, yes. But how many SMEs really take time discuss their customers’ needs and processes – to discuss value, or the return on investment the customer might expect in order to justify a purchase?
This early-stage marketing provides a reality (and profitability) check – ensuring you have a business to back your innovation.
It also adds an invaluable resource to your team: your customers – the people who struggle daily with the problems you’re looking to solve; and who are best placed to tell you the real value of your concept.