In today’s world, innovation commoditizes quickly. It used to be that truly innovative pieces of technology had years of market domination before competition arose. Today, competition enters the marketplace in a few months. In previous blogs, we have discussed that operating Above the Line of Safety, the point in an organization above which roles are empowered with budget and resources to independently solve a problem, is the key to overcoming commoditization. In order to get and stay Above the Line of Safety, organizations need to create Customer Intimacy.
Customer Intimacy
Let’s define customer intimacy as a business model: organizing business efforts to identify ideas to address true customer problems/opportunities at the highest level, bring those to the customers, and working with them to take advantage of those ideas.
It is a complete integrated model – not a sales program. At best, customers see you as an extension of themselves.
If we are going to be preoccupied with identifying/creating ideas that fundamentally help our clients (and lets call them clients – customers buy things, we serve the best interest of clients) then more of our R&D spend must be about those ideas. Let me give an example: let’s say you provide some complex equipment for hospitals. Some R&D spend must be on the broader Hospital problems – how to lower error rates in the hospital, how to get patients through faster. You must bring better ideas to the client than other organizations in the marketplace.
How Does Customer Intimacy Relate to the Line of Safety?
To create the Customer Intimacy we desire, we must work with buyers Above the Line of Safety. This is because buyers Above the Line of Safety have a better understanding of their organization’s needs (due to being higher in the organization) and have budget and resources to assign to solve problems. Therefore, by creating Customer Intimacy with buyers Above the Line of Safety, we gain access to a high-level view of the buying organization’s needs (and likely the marketplace’s needs). This provides insight into whether or not the potential buying organization is actually willing to spend money to solve the problem.
Compare this scenario for a moment to Customer Intimacy with a technical buyer who is below the Line of Safety. Having a strong understanding of the challenges they are focused on could lead our organization down the wrong path of creating a solution that does not resonate in the marketplace with other organizations. In the worst case scenario, we could end up creating a solution that the buyer does not actually have budget for and cannot be sold at all.
The Business Model Shift: Creating Customer Intimacy Above the Line of Safety
It is important to remember that executives are very busy and there is significant competition to get their limited attention. Creating Customer Intimacy is not just selling to executives, nor is operating Above the Line of Safety. Commitment to these ideologies likely means fundamentally changing the way your business operates. Businesses must go from being a vendor that responds to customer needs to a trusted advisor that identifies issues and develops solutions as they are occurring.
Organization’s today often look for innovation to drive growth. In reality, innovative technology today has months, not years, of market dominance before competition arises. For organizations to continue to grow and succeed, they must be able to continuously identify challenges and their solutions. In order to do this, organizations need to find ways to create Customer Intimacy with buyers Above the Line of Safety to understand where the marketplace is headed and how they can capitalize on it.
Written by: Anthony Paluska and Jack Draeb
Anthony Paluska is a Partner at McMann & Ransford with experience helping organizations overcome commoditization by developing stronger, more intimate, relationships with their customers. He has leveraged his management consulting, problem-solving, and change management skills to support 15+ Fortune 1000 organizations, across a multitude of industries.
Jack Draeb is a Senior Consultant with McMann & Ransford who has experience working with Fortune 1000 companies to identify issues, define solutions, guide change management, and deliver lasting results.
