Example of “Defining the Problem” for Buyers

October 28th, 2013 by Matthew Rosenhaft Leave a reply »

Our Target Companies have BtoB Complex, Innovative Technologies with the 4C’s of Adoption Complexity = Problems, Markets, Buyer Organizations, and Solutions

What Problem Do We Solve for Them?
Fix “problem adoption” which is underpinning their market adoption. Problem is not pain. Problem is the underlying cause, pain is the resulting symptoms. Buyers buy to fix a problem, not buy a really cool technology. Well, in more sophisticated buying organizations with adult supervision over their investment in technology or solutions. Very few organizations have a blank check on their spending, but most have to justify to management why they need the latest and greatest in terms of business impact, risk, prioritization, return, adoption, etc.

How Do We Fix the Problem?
Determine what strategic business problems do they really solve for their different buyers so they can segment on problem. What problem do you solve and for whom? I can’t tell you how many companies can’t tell you an elevator pitch on what problem(s) they really solve for the buyers; they can tell me what pain, why they are different, and why their stuff is cool, but not what business problem did the buyers come forward looking to solve. and how did they know they had the problem. Can’t identify whether this was unique to that company or indicative in the market of a whole group of buyers who have a common problem.

*Identify and target when buyers enter peer markets to solve problems that these technology companies can fix, prior to buyer understanding. Find people who self-realize they have a problem; even if they aren’t sure what problem it really is, let alone what solutions options are available. If the buying process preceeds the sales process, wouldn’t you think that the uneducated buyers are reaching out to their peers to figure out what problem they really have, who else has had the same symptoms, and how did they fix the underlying problem?

*Focus on bending the adoption curve through select targeting of pre-market opportunities rather than costly, broad market awareness and development activities that reach a lot of “potential” buyers and a whole lot of non-buyers, but since you can’t tell in advance, you spend a lot of money reaching out to educate broadly. Costs to building a direct market from scratch are expensive. Hence, why we piggy-back on other indirect avenues: an affiliated mature market (fish in their pond – social CRM is an example), leverage existing sales relationships with prior products, OEM to bundle into sale, or outsource sales to channel partners who already have direct relationships. But, indirect market development has huge risks in messaging control, ability to push through channels, inability to affect buyer decisions, and lack of prioritization without support.

Challenge for most companies is that they exhaust their direct relationship networks prior to reaching critical mass. They face the proverbial fork in the road – do we go direct to the market and build organically or do we piggy-back. Most try and do a little of both to see what will stick. From an investor’s perspective, 18 to 36 months to figure it out is a significant risk, even for the most innovative and disruptive technologies.

Why Important?
They live and die by adoption of their disruptive, innovative technology. Given the shift from vendor-driven to peer influence is marginalizing vendors in the early part of the buying process. Buyers demand to be empowered with education on the problem definition before they engage for education on the solution differences. How do you operationalize problem diagnosis on a market level to reach the buyer earlier in their buying process so we can be considered a trusted advisor in their buying process? If you can’t operationalize for the buyers, target those buyers early enough to affect, and then help them through the decision making process; you run the risk that they will find something else to fix the problem. Probably wrong, less effective, more costly overall; but they didn’t know about you until too late, if at all.

A fundamental disconnect in these markets is that vendors think that pain identification will lead to solution. Problem is the key to assisting buyers in determining what underlying problem is the “cause” of their cross-functional, symtomatic pain. Do you “solve” a problem or sell a “solution”? Tactical subordinates will compain about pain, but the decision maker is usually disconnected from the daily pain their people really have. They won’t spend big dollars unless it fixes a big problem. That big problem is organizationally impactful. Not just a technical solution, but people and process disruptive. If I can drop a simple solution and it gets fixed without changing the way we do business, why do I as the senior executive need to be involved in the decision. Big impact, big dollars, big change, big organizational, and big risk = Top-Down Business Decision

Problem adoption is buyers seeking to solve a business problem, which is different than technology adoption which is from a vendor’s perspective. If you can’t help buyers diagnose their underlying problem and get consensus amongst their team, you will find they cannot get agreement to solve the problem and budget for your solution.

When to fix?

How does our potentially market disruptive technology company know when we have a problem adoption problem? Simple answer is “the buyers will tell you”:

  • No visibility to when active buyers enter the market
  • Not reaching them early enough or getting close enough to influence their buying decisions
  • Unique value of the innovation is getting lost in so-called competitive decision comparisons
  • Missing opportunities because we didn’t make their short list
  • If/when they engage, they come prepared with their requirements with little influence from us
  • Tactical sponsor can’t make the strategic business case or internal consensus to make a decision
Matthew Rosenhaft

Matthew is a Social Marketing Executive and is co-founder of Social Gastronomy, LLC and the Social Executive Council. Prior to founding Social Gastronomy, Matthew has over 18 years’ experience as an executive in marketing, product management, and sales. Matthew has an extensive background in the SaaS Software, Social Media, Mobile, IT Services, and Telecom industries. He has prior entrepreneurial experience as a founder and executive in several early-stage venture-backed technology companies, as well as, holds several US patents for a mobile marketing technology. Matthew is a prominent blogger and regular industry speaker on social marketing and strategy topics. Matthew’s blog can be found at www.socialgastronomy.com/blog. For more information on Matthew, you can check out his LinkedIn profile at www.linkedin.com/in/rosenhaft or contact him directly at mrosenhaft@socialgastronomy.com.