“Every Business is increasingly a Consumer Business”

Well not really!! There are plenty of differences one would say. Of course there are, one being the way revenue generation is managed. In a B2B, context, businesses rely more on building sustainable relationships with key stakeholders v/s advertising spend driven approach that a consumer business might employ.

However i think the key here is not so much about the differences, but more about the few key similarities that enhances the probability of success for businesses in general.

A. Intense Customer Focus: Outside in Mind-set/Processes

One of the key aspects of a consumer business is intense customer focus in all of the processes it would employ, be it Production, Product Development or Marketing. There is no other way but to make all these processes market driven or “Outside In”, when you are trying to get your next million users/consumers or when you are trying to discover “unmet” needs of your existing million users/customers.

This is typically one area, where the so called B2B businesses don’t need the same rigor. However many businesses in this space have evolved with the ever changing value chain they operate in, by looking beyond their immediate customers.

In some cases they have gone on to drive changes in the value chain and secure a sustainable leadership position. A good example is IBM which went from selling Computers and Mainframes to corporations, to selling solutions. How is this relevant?

It is so, to sell solutions it was no longer enough that you understood the CIO’s strategies and plans. It became very important that you understood the business and the industry the client operated in and gradually it became even more important you understood your client’s customers, as the so called solution eventually impacts the “End Customer Experience” and reflects on the client’s brand value and consequently on IBM as well.

Did IBM need to understand unmet needs of banking customers when they were only selling mainframes? Maybe not

But they realized that to hold a sustainable advantage in long run they absolutely had to.

B. Innovation: Build fast, Fail early & Finish First

Consumer business are on a perpetual innovation race with a high penalty for not being first to market (e.g HP Touch pad as competition to I pad) and a even higher penalty for being first with a undesirable product/service!! (e.g Crystal Pepsi).

With such high stakes, successful companies have been able to build a culture of quickly building POCs/experiments that they can deploy on a limited customer base, but representative enough of the segment being pursued. This lets the ideas that don’t measure up fail early and also increases the chances of success for ideas that look promising.

In a B2B context, i recently read about CISCO unveiling a “Smart City Model” in their own campus in Bangalore and also building small model of a Smart City along with an Industry association again in Bangalore. This is a great example of a B2B company striving to break new grounds for their core network products, but for a new upcoming application/geography. In doing so they are having to envision a future that start and ends with the consumer who lives in a “Smart City” enabled by CISCO.

C. Go to Market: “Mind Share” to “Market Share”

Consumer Businesses need to entice customers to come back to them repeatedly for repeat purchases, even though there are alternatives for the same need. A lot of times they are trying to build brand loyalty on what is a relatively low value purchase decision for a variety seeking customer. Why should I always buy Coke when I can try Pepsi?

I do it because Coke has my “Mind Share” over Pepsi. It is more a battle of “Mind share” than “Market share”. Consumer businesses use a lot of tools to acquire this “mind share”, from compelling stories that they weave around their products in the various channels that find me, to enormous advertising budgets that hijack air time from everyone else.

Again the degree to which a B2B needs to go might not be the same as a consumer business, none the less there is something powerful to learn here as well.

Intel employed a similar approach many years back with the “Intel Inside” campaign. Was it rational to spend on advertising directly to end consumers, for a company that made & sold chip sets and processors weren’t they better off focusing on their customers, i.e. computer companies!!

Well two decades later, the world no. 2 & 3 by turnover in the computer industry are contemplating their future in an industry that is “Value dominated” by their suppliers, i.e. Intel & Microsoft. .

In essence good consumer businesses will:

• Uncover unmet needs before its Peers or even consumers themselves do
• Quickly build a POC and be able to validate Desirability, Feasibility & Viability much faster than their peers
• Be able to launch a final product/service across a vast consumer base with a compelling story/campaign that connects the offering with the unmet need.

Many of these qualities will also distinguish successful B2Bs from those who did not make it to the top.