Essential Steps for B2B Customer Discovery: Building Sustainable Business Relations
Thriving together.
Introduction
Establishing and nurturing strong business relationships is crucial for the long-term success of any B2B company. Customer discovery is vital in this process, helping you understand your target market, identify key decision-makers, and develop meaningful connections. In this blog post, I outline the essential steps for B2B customer discovery that can pave the way for building sustainable business relations. These steps include identifying your target business customer, defining important enterprise stakeholders, soliciting potential customers, preparing and conducting discovery interviews, and building long-term relationships.
Step 1. Identifying Your Target Business Customer
On some level, the criteria for selecting a B2B "beachhead" customer is similar to any segmentation decision. Many of the same questions apply as you would answer for a consumer: What is the problem your business customer is trying to solve, how important is it to find a solution, and how dissatisfied are they with existing solutions?
To answer the first question, you must have an excellent working knowledge of the target business. This knowledge begins with many things you need to understand for your venture. What industry sectors are your target business customers currently operating? Are you focusing on a specific industry, or do your potential customers cut across several industries? Are your target businesses of a particular size regarding revenues or employees? Is the firm been operating for a long time, or is it an emerging enterprise? Firms have their demographics, and you need to focus on who you want to serve in the early stages.
As part of this working knowledge, you must understand how companies with a specific industry conduct business. You must clearly understand their primary business, who their customers are, what performance outcomes matter the most, and any particular nuances to operational or procurement calendars.
What adds to the complexity and the overall effort is that you must understand their customers deeply. This knowledge includes what problems they are solving for their customers, who they are, and what outcomes their customers hope to achieve from an effective solution. A key question: Does your target business have a compelling reason to buy your product or service? Is the need urgent? While these questions are also essential to answer for a consumer-focused venture, assessing a business customer may be more critical. As I will discuss later, finding the right people to speak with within an enterprise can be very challenging, and the purchase decision (sales cycle) is almost always longer than expected.Â
Target B2B Beach Head Rationale
Does your target business have a compelling reason to buy your product or service? Is the need urgent? Â
Are the primary business needs of the customer aligned with your solution?
Do the firms’ sales cycles and approval processes work for your venture financially?
Do you have enough contacts | access for customer discovery, MVP testing, and early market entry?
One aspect that makes B2B services unique is that the end-user of your product may be either internal or external to the company. For example, are your products designed to support employee needs, the firm's customer's needs, or both? Does your target firm sell to both enterprises and consumers? Will your product support both types of customers?
Businesses purchase internally focused solutions to improve revenues, decrease costs, save time, increase productivity, and improve employee morale. Investing in externally focused solutions is typically customer-driven to enhance customer engagement, satisfaction, and retention. These business decisions focus on the return on investment purchase outcomes.
Another significant difference when selling to businesses is that the sales cycle is more complex and time-consuming than selling to a consumer. The reasons for these sales cycle differences vary. Still, it greatly depends on the number of people involved in the purchasing decision, various stakeholder motivations, and organization policies and procedures regarding procurement. The last factor alone can add months to a final purchase decision.
An associated challenge for a B2B-focused entrepreneur is that you most likely have to establish strong relationships with many stakeholders in each client organization. This fact adds to the time you and your team must spend on each candidate. The longer and more complex sales cycles are something that you must plan for both operationally and financially. Long sales cycles impact human resources and cash flow.
For B2B customers to feel comfortable working with a new enterprise, you must demonstrate that you have the solution they need and can deliver. It's not enough to have a good solution. I will spend more time on how minimal viable products fit into this context, but for now, you need to know what minimum feature set is required for the business to select you as a solution provider.
Deep customer understanding is vital for any startup to succeed. However, there are areas of knowledge to juggle in the B2B context.
Step 2. Defining B2B Stakeholders
When you target businesses to service, it quickly becomes apparent that you may have to navigate with a mix of organizational stakeholders. This stakeholder may include end-users, decision-makers, internal champions, and external influencers. In smaller enterprises, this may be one individual. But in most cases, these roles will be played by multiple people.
Understanding your target market includes determining with whom to speak first. When your target customer is a consumer, you create a profile of an individual who is:
experiencing a problem,
aware they have a problem,
actively trying to solve the problem,
unhappy with current solutions, and
able to pay for a new solution.
In a B2B context, you may need to profile multiple individuals. For example, in many businesses, the person who experiences that problem may not have the time to pursue better solutions or the authority to spend funds on said resources.
There are many approaches to categorizing B2B customers and stakeholders. I tend to break them down to end-users (which may include early adopters in the organization, the central purchasing decision-maker, and any internal or external champions.Â
Generating a profile of an end-user or early adopter will be similar to any customer archetype. There will be specific demographic and behavioral attributes that you will be looking for in this business stakeholder group. For example, if you sell a software service to help analysts create due diligence reports more efficiently, you will want to profile the individuals who serve this role. Are they a certain age, education level, etc.? Additionally, you may look at specific behaviors that make them a good target as early adopters. Do they look for ways to do things more efficiently? Do they sign up for free trials and betas of other software products? Do they mind trying new products that are in early development? Do they have any influence on the firm's purchasing decision-makers?
When you focus on these end-users, you are hoping for several outcomes. First, you want to learn if your solution works within a firm's environment. Does it function in a way that fits within the task requirements? Is it readily adaptable to the end user's functional needs and work styles? Secondly, you hope the end-users communicate their success with your product to decision-makers. This dynamic depends on individual behavior and organizational culture. Is it common for end-users to advocate for new solutions? And does it happen often?
The following stakeholder profile focuses on the decision-maker. In smaller firms, the decision-maker may also be a user. However, in many cases, the individual that makes the purchase decisions is someone other than the primary user. For decision-makers, the profile is less concerned with individual demographics and more about the person's position in the firm and the intricacies of the purchase decision itself. For the decision-maker, you want to understand how they see the problem, the goals for the solution, and any criteria for its success. Be forewarned that sometimes the decision-makers purposes may be different from that of the end-user. You must understand the differences and find a balance to please all involved.
The last category is the champion or influencer. Often, you will find that specific individuals or parts of the organization understand the problem and are willing to advocate for you and your solution while not directly associated with the situation. Often, these individuals are in senior positions and may influence other stakeholders.
A founder must decide whether to start the sales cycle at the decision-maker or end-user level. Each approach has merit. Many advise working both bottom-up and top-down. I usually recommend that if you have already validated the solution for the end-user and have testimonials of success, then going directly to the decision-maker might be most effective. In this case, you can demonstrate that the solution works and is popular with other end users. However, if you don't have such evidence, you may want to build relationships with a firm's user community to demonstrate product efficacy and build early advocates for adoption enterprise-wide. Several products have applied this bottom-up approach, such as Dropbox or Slack. However, remember that this can take time, and you must have the funds to navigate a prolonged sales cycle while demonstrating product efficacy.
If you take this bottom-up approach, you will want to create a customer profile of these early adopters, including their degree of influence with colleagues and senior decision-makers.
Demonstrating Founder Credibility
One of the challenges for any startup that aspires to serve a business customer is to make a compelling case that you can provide the solution consistently over time. Demonstrating that you and your team have the right domain expertise and resources to provide desired customer value is vital for your market positioning. Getting an appointment with a critical stakeholder can be challenging without a compelling case. And suppose you are lucky enough to score an appointment. In that case, there is no guarantee that you will be able to ascertain all the information about any problems and associated needs in a first meeting.
Business customers are looking for domain expertise - do you understand the problem with great depth? Are you committed to staying the course and helping the company solve the problem and handle any challenges? Are you reliable and responsive, doing what you say you will do and responding to any inquiries promptly? Finally, do you have any evidence of these characteristics? Do you have someone that knows you and the industry who can vouch for you?
Many startups will struggle with credibility, lacking domain expertise or having little evidence that the solution works. Not all is lost. There are a few things you can do while you build your credibility. First, humility and transparency about limitations go a long way to making personal credibility. This approach tends to work well in the early product testing phase. You don't want to overhype your product and what it can do. You want to carefully manage customer expectations and deliberate about what the product can and cannot do at its current development stage. I find that end-users, especially early adopters and decision-makers, will be flexible at this stage, but you must be transparent.
As founders assess their domain level and technical expertise, it is vital to identify the gaps in knowledge and access. Once you know what is missing, you and your team should leverage your professional networks and look to add a small number of recognized advisors or strategic partners with the required knowledge and skills. Having this extended team will help with messaging credibility.
Step 3. Soliciting Business Discovery Interviews
I always tell founders that as they plan for their first customer engagement, it is essential to remember that it is game on as soon as you take the first step. Every touchpoint with your customer will influence their thoughts about your venture and brand. These early customer engagements are genuinely the start of your brand identity.
The first thing I have founders do is create a spreadsheet breaking down their engagement activities based on what they assume is the sales funnel associated with this business customer. You can always start with the customer sales journey - awareness, consideration, purchase decision, and post-purchase. See my earlier post on sales cycle promotional strategies. Then, for each phase of the sales funnel, decide on your messaging and content at each stage. How do you plan to capture the business customers' attention? What is the message you want to convey? What is the call to action necessary for the customer to move to the next funnel stage? What promotional channels will you use to create awareness? Finally, how do you plan to measure success at each stage?Â
Once you have established the basic funnel information, generate a list of the business customer stakeholders you want to reach and engage. Depending on the industry and strong demographics, list up to ten firms you believe are part of your target segment. Based on how you have planned to start the engagement via your sales funnel strategy, arrange to reach out one at a time over a short period. Leave yourself enough time to respond to requests as you attempt to reach the right stakeholder. You have a plan to move the engagement step by step. If you start with an email, your goal is to schedule a phone call, followed hopefully by an in-person meeting, and so on.
Generally, establishing these early business customer engagements takes time which is one of the first reasons a typical B2B sales cycle is longer than B2C. As mentioned earlier, finding the right person to speak with is challenging enough. Now getting on their calendar is another mountain to scale.
The most important thing to do is to record each step of the process, including the time between each step. You need to see this as a pipeline, and you want to document each step. Your experience with engaging B2B customers can be an authentic learning experience for you. The responsiveness or lack thereof are data points and early feedback for you to assess. It would be best if you did not jump to immediate conclusions. You will seek evidence of the business' interest in solving the problem. Is there a strong interest and immediate need to solve the problem, or is it low on a priority list? Are you targeting the right business segment, or are you reaching the right decision-maker? Again, don't jump to conclusions; interpret early responses as learning to build on as one solicits more and more information. Ultimately, this information will be invaluable for future marketing strategy and financial planning.
Step 4. Conducting B2B Interviews
Like a consumer-focused discovery interview, you must prepare a semi-structured interview protocol to optimize your time with a business decision-maker. You want to ensure you cover all critical assumptions you want to validate. You also want to present your venture professionally.
As with any discovery protocol, I suggest you create a short series of questions that guide the business customer to describe their experience as a story. For example: Tell me about the last time you experienced said problem or job-to-be-done as the customer describes the background, probe for details about the situation, its timeframe, the severity of pain points, specific actions, and the customer's emotional state throughout the experience. Your questions should be mostly open-ended, allowing the customer to openly and freely drive the conversation without being led by your preconceived notions.Â
There are some differences in the types of questions you will ask in a B2B context. I have listed some starting questions for each area to get you started. See list below.Â
Company Profile: Any firm characteristics/demographics  that you want to validate? Main Customers? Product Categories?
Business Objectives: Short & long-term goals? Customer  Outcomes? Product Positioning?Â
Decision Maker/Unit Role: Position? Roles and responsibilities? Who they report to and how many employees  report to them?
Opportunity: Tell me a story about the last time you had to do X job?
Pain Points: What was the most challenging thing  about…..? Why was it the most challenging? Frequency? Intensity? Time  Commitment? Impact on individual or firm performance? How wide spread is the  problem across the firm?
Current Solutions: How did you currently solve it? What do  you like about the current solution? What’s wrong with the current solution?  How much are you currently spending on solutions?
Product Benefits: What would a solution have to do in  order to be considered a success? What metrics are used to measure and  monitor solution performance? Who else in the company will benefit from a  better solution?
Purchase Decisions: What is the firm’s process for purchase  approval? What is the typical length for approval?
As is common practice, you want to start with questions that help you validate that the business and associated stakeholders meet your targeted segment. For example, in the first category of questions, you want to confirm firm demographic information such as company size, the number of employees, types of customers served, and products sold.
Secondly, you want to learn more about the firm's overall objectives. What business goals are they hoping to achieve both short and long-term? You also want to learn more about the value they provide and what outcomes their customers want to achieve with their products.
Thirdly, you want to make sure that you have a good understanding of the position and role of your business stakeholder. Here you can probe for information about their role and responsibilities in the firm. For example, who do they report to, and how many direct reports do they manage?
In the next section of the interview, you should move to the problem you hope to help the firm solve. This question can take several forms depending on the context. For example, you may start with the standard opening, "Tell me about the last time you did X" The "X" will relate to the job or task the business customer is trying to accomplish. For example, "Tell me about the last time you needed to recruit a person for your department."Â I find this initiating probe about the problem challenging, so make sure you have the question prepared beforehand, and some variations in case one is needed.
Professional Tip
Active listening is a fundamental skill for effective customer discovery. During customer conversations, practice active listening to understand their challenges, goals, and expectations truly. Ask open-ended questions encouraging customers to share their experiences, feedback, and suggestions. Take notes and document critical insights to inform future product development and customer engagement strategies. You demonstrate your commitment to understanding and addressing their unique needs by actively listening.
Once the business customer responds to the lead question, deep-dive questions focus on the challenges encountered while working on the specific job in question. During this interview phase, you should assess the severity of the difficulties in terms of frequency, intensity, time lost, and impact on individual or organizational performance. Then, depending on the problem, you can ask how much time it takes to solve the problem and the current costs associated with its solution. One way to approach this is to ask how many person-hours it takes to accomplish a task or solve a problem.
During any customer discovery interview, one of the most critical questions is understanding how the firm currently solves the problem. Here you are listening for a few major data points. First, are they actively trying to solve this problem? If they are not, then this is not your target customer. Secondly, what solutions have they tried? This response will provide valuable information on competitive solutions. Third, what firms are providing current solutions? What does your potential customer like and dislike about these solutions? Finally, you should be able to ask for information about how much they spend on these solutions. This answer provides a range of what they are willing to pay based on actual behavior. Sometimes, you will see a question like, would you be willing to spend X dollars for an effective solution? These "would you" questions lead to hypothetical responses and not evidence of actual behavior.
Next, it is essential to solicit how decision-makers determine whether the solution is successful. Finally, what are the criteria for a successful solution, and what metrics are applied to measure and monitor solution performance? This last set of questions helps you understand expected product performance, whether for your existing or developed product offering.
After learning about the problem and current solutions in the last section of questions, you can ask questions about the decision-making process. As a starting point, you can ask how widespread the problem is across the firm. Next, you are looking for who else may benefit from a solution and whether there are others you should speak to within the firm.
Additionally, you can ask how the company decides what products are purchased and what the approval process looks like for this kind of product. As part of this inquiry, you want to learn the timing of purchasing approvals. This information will provide insight into the size of the sales cycle for financial planning purposes.
Step 5. Creating a Sustainable Business Relationship
Building sustainable business relationships requires ongoing effort and nurturing. Establish regular communication channels to inform customers about product updates, industry trends, and relevant insights. One of the circumstances to consider is engaging with business customers when your product is under development.
Offering pilot programs or trials to selected customers can be a powerful tool in B2B customer discovery. You gain valuable feedback and insights by allowing customers to test your product or service on a trial basis. Monitor their usage, collect feedback, and address any issues promptly. Pilot programs will enable you to validate your solution, refine your offering, and build trust with potential customers.
Throughout the process, offer ongoing support, training, and resources to ensure customers maximize the value of your product. Actively seek feedback and continuously improve your offering based on customer needs and preferences. By nurturing long-term relationships, you can foster loyalty and generate repeat business.
Summary
In conclusion, customer discovery is pivotal in establishing and maintaining strong business relationships in the B2B sector. By identifying the target business customer, understanding their industry and specific needs, defining B2B stakeholders, conducting professional discovery interviews, and nurturing relationships through regular communication, pilot programs, and ongoing support, innovators can create sustainable partnerships that drive mutual success.
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