Recurring revenue lies at the heart of a great B2B relationship. It’s the product of tons of “due diligence” and the need to be super careful about which service provider that you’re going to marry. Once you get started, you are on a journey together that you know won’t last forever — but it should feel like that. And yet over time, that relationship can easily get de-prioritized on either side as it settles in. Newer, better opportunities are always being dangled around both the buyer (i.e. better services) and supplier (i.e. better customers).
Add to this the fact that in the information age, large capital outlays are simply a bad idea when you want to quickly switch to the latest and greatest seasonal cloud beverage (i.e. just like the Pumpkin Spice latte at Starbucks). But each of these umbrella-laden, beautifully enticing drinks are all designed to get you fully locked-in to what they have to offer. And then before you know it, you’ve re-married into a new supplier relationship that comes with significant expense to get out of, too.
It’s unfortunate that much of the new approaches to services involves “design” of the variety that is generally the unpopular “lipstick on a pig” or “smartness-spray on a lobster” variation. So it’s a kind of seduction used to simply re-establish an old, unproductive kind of long-term relationship that doesn’t benefit either party to the full extent.
What if instead we simply assumed that each B2B relationship might be at best short-lived, but wonderful? That’s what happens in the B2C space. But in order to achieve that kind of shift, we need to re-think how a B2B solution needs to be more portable both for the buyer and for the supplier. In other words, if you make it a little easier to have a friendly separation (instead of an ugly divorce) between both parties, then it can be win-win. And who knows? You might work together in the future in any form of capacity for a fun “one-year stand” or the likes. How do you get there? Let’s think that through a bit.
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Survival By Copying
A quarterly earnings approach results in companies in competition with each other as a high stakes game. And they will tend use the time-honored strategy for survival of copying a successful “best practice” as the only way to evolve.
A company with much more cash in the bank can act like a disruptor and ask, “What’s Silicon Valley doing?” And they can go off and either buy the apparent winner, or attempt to re-create the approach in-house. The latter is best — but difficult.
Why? Because there’s internal competitive forces that prevents new ideas from getting born. And there’s also a giant pile of failures where new approaches were tried, and then failed. So there’s little enthusiasm about re-trying an idea that failed before.
McKinsey Diagrams State The Obvious
You can read diagrams and processes from any brainiac consultancy to know that it’s obvious you’ll want to improve your customer experiences. And that is especially true with any company running at scale. But that involves needing to transform the company’s employee experience at the same time — who owns that budget? Usually HR.
In my experience, HR folks would love to be tasked with improving employee experiences. But often times they’re tasked with tactical and more dreary work like: 1/ managing legal risk and 2/ reductions in force. When they get the chance to do awesome things like fabulous employee onboarding and do learning + development right it’s a whole ‘nother world. It’s not a world that happens all the time, though.
The C-19 Situation
The disruptions that have been set in motion by C-19 present a few simplified rules of business that necessitate a company’s ability to move faster than average, i.e. compared with pre-C-19 conditions.
Although a bit cryptic (note that this blog is my public note pad), this is where I’ve landed on the “new rules”:
- IF Product = Endpoints, THEN CHANNEL is either IRL or NIRL.
- IF Service Delivery Endpoint = IRL, THEN DBT is HIGH (and difficult with SCM aspect) AND DMT (findability and learnability) is HIGH (and easy) because foot traffic is down and the physical service footprint of the service has low efficacy like Disneyland or McDonald’s.
- IF Service Delivery Endpoint = NIRL, THEN DBT is HIGH (and easier) AND DMT is HIGH (and means hybridized product x marketing) because it’s more of a virtual offering and needs no physical footprint like Google.
- IF Service Delivery = CHANNEL AND CHANNEL = IRL, THEN DBT = MEDIUM AND DMT = HIGH, it’s a shipping company or the likes like DHL or UPS.
- IF Service Delivery = CHANNEL AND CHANNEL = NIRL, THEN DBT = HIGH (already) AND DMT = HIGH (lots of competition), it’s a telecommunication company or the likes like Cloudflare or Comcast.
Every B2B company needs to act more like a B2C company which is more experience and brand driven. DBT differs depends upon the industry you’re in, and it depends upon your client’s state of evolution in the Kardashev scale. DMT is actually much easier because it’s all-digitally inclined.
It’s a holiday here in the US so I’ll continue with my part 2 here some day. —JM