Deep Dive: Collaborating with customers

Communities power innovation in high-tech circles; can they do the same for B2B?

In this edition, I share insights from Peter Yang’s technology-focused Creator Economy, translated for application by B2B innovators. The tech community is not always a disruptive threat for real-world businesses. Tech startups and creators are building new businesses and developing new business practices for doing so. B2B companies can learn from them and develop their own innovation principles and methods for use in the real world. Communities are a high-powered example. In the tech industry, communities enable real-time feedback from customers and hyper-fast product innovation. For B2B companies, communities help innovators step up to help customers transform for the digital age, building unbreakable customer loyalty as they do so. B2B companies must walk before they run, and Yang’s insights point the way forward

Communities connect with the human needs of business customers

I have often written about communities, mainly in the context of doing business as humans for humans as a counterweight to doing more business through virtual means. My central idea is that it is inappropriate to think of human-to-human interactions as those left over as more of our work and life migrate to the digital world. Instead, we all expect higher quality and more satisfying human experiences because virtual ones are inherently inhuman. They cannot deliver what we need from other people. Business customers will demand increasingly improving human interactions as a requirement for doing business. B2B companies must offer virtual experiences enabled by data and artificial intelligence (AI), but human experiences are essential for competing through differentiated offerings. This is not an argument that incumbent businesses doing business as humans for humans have a competitive edge that will defeat disruption. Instead, it is a call to action to invest in human innovations to achieve better and better outcomes. Digital technologies may deliver exponential gains in productivity, quality, and growth, but real-world companies must win where they live and work: in the non-virtual world. The bold design of human-to-human interactions cannot be left to chance,

Last year, after a few dozen conversations with business leaders, I looked into communities' social and scientific foundations, and I published a LinkedIn article titled Are Communities the Salvation of Real World Businesses? I offered this perspective for B2B innovators:

Communities satisfy essential human needs. Participating in communities creates a feeling of fellowship formed around common interests and goals. Humans create communities where none exist because of needs for safety, belonging, and making a difference. For real-world businesses, communities are not a tool for cynically creating sales, but a sincere opportunity to assist and, by doing so, to earn trust. In the best executions, communities motivate every employee and function within a business to create value around what matters most for customers. Involvement in communities leads to a culture of service and provides meaning for work. Communities are not a means to the end, but a purpose for being.

In a way, communities are like culture. It is often said that every company has a culture, whether or not that culture is consciously understood and nurtured to achieve an organization's goals. I suspect that unmanaged cultures create problems for companies far more often than they create opportunities. Left alone, culture blocks change. Thoughtfully nurtured, they do the opposite.

Similarly, all companies’ products and services are experienced with a community of people, including customers, potential customers, and past customers. Failure to engage with your community is not only an overlooked opportunity, it is a formula for failure—especially if you buy my argument that human-to-human interactions and innovations are becoming more and more critical in the digital age. Do a quick internet search and you will find community marketing programs in place at some B2B companies, most often as a tactical extension of traditional business marketing methods. Going forward, every successful B2B company will embrace community development and do so as a strategic goal.

B2B companies can draft on technology startup methods

Peter Yang, senior group product manager, creators at Reddit, and author of the substack newsletter, Creator Economy, provides straightforward advice for entrepreneurs building startup technology businesses. Every company in Yang's world is in a race to first survive, then get traction and grow. B2B companies can win in their race by drafting on those approaches. Below, I've shared his three-step process (from his newsletter edition here) and added my thoughts for applying them as guiding principles for B2B companies:

Step One: Create a community. Announce your product early and invite interested customers to join an online community (e.g., Slack or Discord). Ask them to introduce themselves and start building trust.

Yang writes from the perspective of creating a community as a new product is designed and launched. As established businesses with ongoing customer relationships, B2B companies may start communities for new or existing products and, importantly, for services. Services may include those that are sold and directly generate revenue, but also those services that are delivered along with products as presale, transaction, or post-sale activity. The important thing is to offer customers the opportunity to participate in conversations around shared interests and experiences. Introductions are essential for making the relationship personal and, as Yang highlights, to build trust.

I would offer another critical idea for building trust in business-to-business relationships. Trust is not just about providing products and services that deliver on their promised features and benefits. It is not just about creating value at a fair price. I would argue that features and benefits, offered at a fair price, combined with acceptable performance after the sale, are the normal execution of B2B business models. Customers expect competence, and successful execution only acts to prevent “breaking” trust. This is especially true as new technologies and disruptive services seek to offer replacements for the traditional value B2B companies offer.

In the digital age, competing in disrupted markets, B2B companies must find something new and revolutionary to create trust. Communities are a natural place to look because they are where humans come together to solve problems. Working together on projects deepens customer relationships. Successful results lead to more collaborations and, over time, a virtuous cycle. While average B2B companies will hunker down, building moats to fend off competition and disruption, leading innovators will create, nurture, and serve communities, building a strategic advantage through trust. My ideas about the power of communities and trust in the digital age are inspired Rachel Bostman and Jon Levy. You can find some of their work here and here, and I will reference their insights as we push further in future editions.

Step Two: Build in public. Ask customers about their pain points and share product ideas and designs early and often. Give them product demos and show them you're making adjustments to your roadmap based on their feedback.

This is about showing your vulnerabilities. In my very first newsletter, Are you acting on the “grace to innovate” granted by your customers?, I shared Sharon Newport’s insights that the pandemic has opened the door to fearless innovation by suppliers because customers welcome help and are willing to forgive missteps. Trying is rewarded. Not trying is noticed. Building communities is a way to extend your company’s grace to innovate as the pandemic subsides.

In Distribution Leans In: Stories of Resiliency and Innovation During the COVID-19 Pandemic, Eric Metzendorf, chief corporate affairs and strategic partnerships officer at Dawn Food Products, offered this evidence that is all about the power of community orientation:

We launched a new online ordering platform during the pandemic, which helped us respond to customer needs to reduce human contact. But online ordering is only one element of how we are innovating during the pandemic. Lockdowns and social distancing requirements severely impacted our customers. We helped them adopt safety protocols because we had a greater capacity for gathering information and requirements quickly, and we shared them in a way that was aligned with how they run their business. Then, we helped our customers in the front of their house. … We provided information to our customers on how to use social media campaigns to help them engage in their communities and let their customers know when they were open for business. Our digital investments are built on helping our customers do what they do and then offering tools that help them do those things better. If our offerings are compelling, they create a kind of voluntary lock-in for doing business with Dawn. That stickiness helps to take price out of the conversation. We are automating, but we are very conscious of building human relationships and not detracting from them. … Our people and culture are a critical point of differentiation because we have team members who've been around baking for their entire lives ... we know bakeries, we know bakery production, we know bakery merchandising, and that experience and knowledge is something we share.

I would add that active community engagement creates confidence for B2B companies. In a crisis or through innovations, knowing your customers gives you the confidence to move forward. Market research may help companies understand customer needs as input for designing products and services; active communities create a kind of relationship equity that can offset the risk of acting on bold innovations. Combined with the “grace to innovate,” communities are an essential asset for the B2B revolution.

Step Three: Don’t just talk about the product. Build a casual environment where customers feel comfortable talking about anything. This is the best way to uncover new pain points and walk in your customer’s shoes.

Human innovations are all about doing business as humans for humans. Communities are an essential aspect of living our lives and doing our work as humans. And within every community, there is communication in the form of conversation. Business customers know that the sales and marketing functions of B2B suppliers are about positioning for competitive advantage and driving sales. Before the internet, customers depended on sales and marketing communications for information because there were few other sources. Online searches freed customers by allowing easy access to information about solutions, performance, and the experiences of different customers. By typing a question in a search bar, customers got answers. Those answers leveled the playing field when they engaged with salespeople and marketing materials. From the supplier's perspective, the internet disrupted and broke apart essential communication tools. Communities are the way to build them back, better than before.

Ideas for innovating B2B

Communities are a powerful tool for B2B companies, but their effectiveness is inexorably linked to following Yang’s suggestions, chief among them building trust. Without trust, business customers will perceive communities as cynical, self-interested attempts at manipulation. In their bones, B2B companies know this and are, in turn, skeptical about their ability to create productive communities. And so, the first step toward incorporating communities into your innovation culture and capabilities is to overcome internal barriers. By following Yang’s advice, your company may not only overcome obstacles but also build a sense of ownership among your employees. Communities are not just tools to help employees do their jobs; they are something they come to own through their commitment to participate and nurture them. Again, Yang offers straightforward advice. I offer his three barriers below and his solution, with a few parenthetical comments and resources:

“Customers don't have time to talk to us every day.” From my (Yang’s) experience, customers who care about your product (e.g., early adopters) will be more than happy to talk to you regularly.

“Doesn't this lead to the loudest voices in the room problem?” Yes, but you can mitigate this by recruiting a diversity of customer segments to your community. It’s ok to be a little biased though—if you’re building a 0-1 product, the early adopters in your community will be the people who spread the word. (Read here to understand 0-1 product concepts.)

“Are you saying we should ignore other feedback channels?” Not at all. You should still pay attention to stakeholders, research, A/B tests, and more. But I've found that having a place to talk to customers daily accelerates the feedback loop dramatically. (A/B testing is about using data to make decisions.)

Join the journey

In summary, I would offer three observations: 1) communities are a powerful and overlooked tool for B2B companies; 2) the leading edge of community best practices is found in the business of technology startups and the creator economy; and 3) B2B leaders can look to their next-generation team members for designing community programs because, just as digital technology is natural to them, so are modern communities for the digital age.

If you find value in this edition, please share it with others. Invite them to join our community of B2B innovators. Please give me your advice and direction on how I can strengthen and engage with our community. How can I be of service? What can we create together? Don’t be a stranger. If you like, reach out directly at mark.dancer@n4bi.com.