Identifying the links in the value chain
Editor's note: Eric M. Whipkey is director of client and consumer insights at Sodexo, a global quality of life services company with operations in the U.S., Canada and Mexico.
This article reimagines consumer research through the lens of the business-to-business researcher or, more accurately, the business-to-consumer-for-business (B2C4B) researcher. I often hear those in the B2B space say, “What does consumer research do for us? Our client knows what they want.” This may well be true but before you turn the page, let’s take another look and ask a few questions:
Would knowing who your client’s customers are help the sales team sell more of your services/products?
Would knowing how people talk about your client and/or your client’s services on social media help?
Would knowing what types of services are of most interest to these customers help?
Would understanding the needs of your client’s customers help you develop new product ideas to sell to your clients?
My guess is that if you answered no to these questions, your clients ARE your customers. In other words, there are no other links in the value chain. If you answered yes, you are probably providing services or products that are later consumed by others in the chain. Outsourced services that impact the quality and satisfaction of end-user experience come to mind, such as facilities management or food services, as do manufactured products like engine parts, building supplies, medical devices, etc.
If your products are sold to a client that then sells or sources that product to another level of consumer, you may well be able to spin gold for you and your clients by better understanding the needs of the next level or two of that value chain. The question really becomes, who is your client’s “ultimate client” and how can you help your client to better understand them? What’s more, what could this do for your relationship with your clients?
Let’s revisit those questions:
Who are your client’s customers? Segmentation research would apply here and yes, this would put your salespeople squarely in the driver’s seat. They could walk right in and surprise your clients with insights about the various types of consumers that use their products, their needs, their attitudes, etc., and how your product helps to satisfy those needs.
This “Challenger”1 approach has been shown to be the most effective sales approach out there. Imagine, for example, if you could tell your clients that have been targeting your outsourced services to middle-aged men that many younger women would really love the service if they allowed you to position it differently to appeal to one group’s sense of adventure and another’s need for status.
How are they talking about your client on social media? Your brand might be essentially invisible in these conversations but for your client, your service or product, it might make or break their brand. If you consider all aspects of their brand and/or the services that you are providing, you could learn a lot about what you should do to align with what different people seem to want from your clients. Even better, you could conduct additional research to build and test theories generated from social media which would better align your products/services to your client’s customer’s needs. This, too, could help your sales team from the Challenger perspective and/or help you refine your existing offerings and/or develop new offerings for your clients.
What is of most interest to them? Attitude-and-usage research would be very useful here and could easily be combined with segmentation research to understand what each segment wants and needs. That would make your sales pitch all the more valuable. Actually, you would need to have this information to inform your product’s new positioning for each new segment.
What are their new-product needs? Designing products around consumer needs is nothing new. Researching (or ascertaining) the need below the client level in the value chain is what might seem revolutionary here. But, the idea is to understand who your client is trying to keep satisfied and loyal and design your service or product to meet their professional, personal or quality-of-life needs. You should not base your knowledge of what is needed on your client’s perception, as standard B2B research would do. You will be much better off developing an understanding of this for yourself and your client will think much better of you for it, as well.
All about the value chain
The point is that you can develop important insights for your company and your clients by exploring the value chain. The problem with the traditional B2B research mind-set is that it assumes that your clients are your sole customers. Of course this is true but there are usually other consumers of interest, too. It is all about the value chain. Somewhere down the value chain is a consumer to whom your client sells its products or provides services. The trick to making consumer research relevant in a B2B world is ensuring that you explore your client’s ultimate customer. It is business-to-consumer-for-business.
So how do we determine which link of the value chain upon which to concentrate? Like many things in life, the answer is often, it depends. A rule-of-thumb is to look at the first section of the chain, think about who is going to touch the product or service next or who directly benefits from it at the client site and ladder down from there. Sometimes there is only one link in the chain, like a consumer packaged goods company – you create a product for a consumer. But that’s not what we are discussing here. B2C research is very straightforward when it comes to the value chain. Let’s take a manufacturing industry example:
Steel companies make steel for the automotive, construction, energy, manufacturing, pipe and tube and steel distribution industries. Who is the immediate client? There are many. But who is the ultimate client? How far down the chain do you go? It really depends upon what will resonate most with your client. For the automobile industry, it is NOT likely to be the end consumer (car buyer) but in construction, it could be the architect, the builder or even the homeowner picking out materials at Home Depot.
Builders want strong but flexible materials but homeowners will want reliable materials that will hold up for years under extreme stress (i.e., earthquakes, severe winds, etc.). While you can just ask your immediate client what sort of steel to make and still satisfy them in the short term, your goal is to add value for your client, improve revenues, grow your business and theirs and build your brand.
As a market researcher, the question is really whose opinion, perception or needs will be most influential in your client’s steel choice? When your immediate client makes their decision, they are looking for some evidence that those down the value chain will pick their product over others. If you can show them that those consumers or certain segments of consumers are more likely to choose their product due to some inherent property of your steel, you have a pretty strong ROI story to tell them. To this end, you would do much better by striving to satisfy the ultimate client’s needs and bringing your clients loyal advocates.
With B2C4B research, the goal is not to get consumer research to tell you about your client, directly. You need consumer research to understand what your client’s customers’ need so that you can turn to them and tell them, “I know who your clients are and I know what you need to provide them.” What’s more, you can ensure that you can do it better than other providers. This way you come off looking like a very innovative company that really knows their business and what’s still more, it would be true. In essence your consumer research becomes a key part if not the star of your sales pitch to current and potential clients.
So, what type of research would apply using this new frame of reference? Like a lot of things it is easier to discuss what will most likely not be as useful. Loyalty research like net promoter and advocacy research is not especially helpful, as your client’s customers don’t likely even know about your company. Neither will brand and brand positioning work about your company help you much. This could be explored with your client’s brand or perhaps the positioning of your product type or industry.
Others that will not likely apply are obvious, like package testing, copy testing, etc. As mentioned earlier, the research should focus on the ultimate consumers’ needs, attitudes and use patterns, perceptions of your client’s brand and/or the types of products/services produced by your client(s). In addition, do not shy away from including your clients and potential ultimate consumers in co-creation sessions.
Even better, use your end-consumer insights to feed co-creation sessions with your clients. You will be surprised by your clients’ positive reaction and the role that you and your company can play in the strategy and deployment activities of your clients. This simple change of reference makes consumer research every bit as important in the B2B world as it is in the consumer packaged goods world. It just needs to be applied from a slightly different point of view.
A clear understanding
At Sodexo, we use an attitudinal segmentation with our clients that we call PersonixTM along with other insights tools and a subsequent ideation session. Our tools provide our clients with a clear understanding of the different attitudes that their consumers may be bringing to the table and what consumer trends may be influencing those attitudes as they experience and react to “our services” on a daily basis. We find that this challenges our clients’ thinking both early on in the sale and further builds relationships and confidence after the sale. In line with the thinking highlighted in The Challenger Sale, this elicits responses from clients such as, “You really understand this organization better than some of us.”
Isn’t that really what you, as a B2B market researcher, want to hear? If your client sees you in this way – as a strategic partner and an expert in helping their organization improve performance and customer satisfaction – it is hard for them to say, “Let’s look for another provider this year.” Given the goal of B2C4B research, I know this is what we want to hear from our clients as we work together to create opportunities that enable our services to deliver meaningful impact down the value chain by improving their customers’ quality of life.
1 Dixon, Matthew, and Brent Adamson. The Challenger Sale. New York: The Penguin Group, 2011.