This article was first posted on LinkedIn.
Your company has been in the B2B market for over 50 years. During that time you have built a distribution, manufacturing, or sales process that has been refined and implemented at its highest efficiency level. Quality control is your bread and butter. Over the past 10 years your margins have started to dwindle as the internet information age and price comparison shopping has changed the nature of your industry. The owners may have finally started to realize that simply ‘trying harder’ and ‘sticking with the plan’ doesn’t mean that year over year growth will continue. You are still doing ok, but you’ve had to focus and/or shift your current B2B business model to some degree and your owners are more frustrated than they were when the money was flowing in like…a river? Ok, maybe or maybe not a river, but you saw growth year over year for many of those years.
So, you’ve decided to maintain the existing business and enter the B2C model to try and make up for it. You tell yourself, “Everybody else is selling product online to consumers! Why can’t we? We already have the product [or service], we just need to make it available to consumers!”
The first thing you need to do is decide whether your owners have the wherewithal to be flexible and innovative. If you have been playing the quality control and/or distribution game for the past 25 years, most likely that is a ‘no’. Has the ownership changed hands? Even more emphatically: ‘no’. The first challenge you have is getting the current owners to agree to create a totally separate business with separate management (and possibly separate facilities) so you don’t try and have the current sustaining business so much as cross paths with the disruptive business. Ultimately, this is a startup and something that most who have been doing quality control don’t have the stomach for. For more on this, read Innovator’s Solution by Clayton Christensen.
If you are confident your organization has the capacity for flexibility and innovation, then I would suggest that you are on the right path to at least having the capability to explore, or even grow, a different model from the sustaining model.
If you can’t totally separate the existing business model from the old, then you will continually have the new business feel inferior to the old business and ideologies will constantly compete. To have employees working on both sides of the business, is also ineffective. Constant comparison and mind creep will sink in and will have to constantly be defeated.
Then, there is actually starting this B2C business from scratch and trying to immediately get into the game and compete with others who are established enough to have actual profit OR have investors pouring cash into it in hopes of becoming profitable. The day is gone when you can create a website and spend a ton of money on online paid ads and watch your cost per lead go down without any focus on brand recognition at all. Most from the B2B world are still focused on traditional advertising so they don’t even know what an online paid ad looks like or how to develop appropriate key performance indicators (KPI’s). And unfortunately, there is no college education for this. An MBA focused on business process won’t teach you business building.
Finally, I should mention the starting point, voice. This is where I should have started all along. KPI’s are the second step and these should be flexible until you’re seeing website traffic and a return. Goodbye to the MBA degree, goodbye to quality control, at least for the time being. Hello to the free economy where users expect value from your product/service with the ability to compare details online quicker than you can adjust your ‘sale’ price or offering. You must gain a unique voice. We’re not talking about a unique selling proposition, necessarily. This is not your product, service, or what you are known for. This is how you communicate to others, what tone, disposition, and even medium. The channels you communicate in will ultimately result from your desired voice. Your offer may not be much different than the other guy who is selling the same thing at that other website. But your voice can and should be unique. Find an audience and your voice first, and see if that audience is willing to listen and then you can find a way to impact that market by defining those KPI’s. Then, and only then, can you shift your focus to managing the process. But if you think you can take an existing B2B business and merge it into a B2C market without first developing a serious understanding of the voice that you are projecting and who you are communicating to, you can’t.
From a recovering MBA.