Have you ever played the game of “telephone,” where players whisper a message from one person to the next?  Once a message goes even one or two hops, it can break down quickly with often hilarious results when the message is announced at the end.

The same dynamic exists in B2B value chains though the end result is less amusing.  If a B2B company relies solely on the next hop in its value chain to know how well it’s satisfying customer needs and identify opportunities for improvement, it’s at risk of receiving poor quality information.

This is because the entity who buys your product or service is often not the end customer, i.e. the person or business who uses your product.  And it is the end customer, the user of your product, who derives most value from and hence creates demand for what you sell.  For more on this topic, see Tony Ulwick’s comments on defining what your market really is.

To paraphrase a former colleague of mine in a B2B payments company, to be the best B2B company you can be, think of yourself as a B2B2C company.  You must reach deeper into your value chain and understand your “C”, the end customer.

To illustrate how to do this and the potential payoffs, let’s consider a CleanCo, a hypothetical commercial cleaning products company.  While its primary buyers are distributors of cleaning supplies and equipment, its end customers are janitorial services companies, who buy from the distributors.

CleanCo launches an end customer insights program of customer interviews, on-the-job observation, and other market research methods.  Its goal is to understand better the needs of janitorial companies and how well CleanCo’s products meet those needs.  The research uncovers not only long-term opportunities for new product innovation but also quick-win opportunities for marketing, operations and customer experience:

Function Insight Opportunity for Action
Product Innovation CleanCo’s research team observes that several janitorial companies don’t use CleanCo’s floor cleaner product in many retail environments, especially apparel stores.  The reason is CleanCo’s trademark “lemon fresh” scent conflicts with the scents many retailers use to influence consumer buying behavior. CleanCo realizes that is has an opportunity to increase market share in retail applications by developing a scent-free floor cleaner.  Its R&D team takes this a step further and has a potential breakthrough new product idea for custom-scented floor cleaners geared to specific types of office and retail environments.
Marketing Janitorial companies tell CleanCo’s phone interview research team they don’t select CleanCo’s disinfectant products when their clients specify eco-friendly products.  For those clients, they use different, “green” products. CleanCo’s products are just as eco-friendly as the “green” products, but its marketing team had not realized this was an increasingly important customer need.  CleanCo quickly updates its marketing materials and sales training curriculum to emphasize its legitimate, eco-friendly credentials.
Operations A surprising number of cleaners tell the CleanCo research team that CleanCo products aren’t always available or in good supply at their distributor, resulting in lost sales.  This feedback matches up with comments CleanCo’s sales, and operations teams has received from some distributors. CleanCo has slightly slower order fulfillment times for its distributors, relative to its competitors.  CleanCo’s sales and operations teams address this in the short-term by advising distributors to reorder two to three days earlier, and work on a longer-term fix to reduce fulfillment times.
Customer Experience From time to time, larger janitorial service companies have detailed technical questions about products they’ve purchased, or new products they’re considering.  In these situations, their distributors seem to experience confusion and delays when trying to obtain detailed answers from CleanCo, especially compared to competing brands. CleanCo’s customer experience team designs a standard process and Service Level Agreements (SLA’s) for its sales team to answer technical product questions from internal product experts.

While CleanCo is a fictional example, the insights and benefits described above are real.  And they are just a small sample of the valuable market intelligence available when B2B companies engage with their end customers.

When implementing this type of end customer insight program, take care to proactively communicate its purpose to your key distribution partners.  It should not be seen as an effort to go around one’s immediate buyers or ignore their input.  Rather, it’s an investment in their success, as well as yours.  By improving your understanding of the end customer, you can supply your buyers with a steady flow of successful products and services, which is a win-win for both of you.


Doug Fowler

Doug Fowler, COO

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