If you could wish one thing for your company what would it be? Many would choose 􏰁􏰂􏰃􏰄􏰅􏰆􏰇􏰈􏰉􏰊􏰀􏰋􏰌􏰋􏰅􏰆􏰍􏰎􏰆􏰇􏰈􏰉􏰀􏰃􏰂􏰏􏰆􏰎􏰍􏰙􏰀􏰏􏰂􏰃􏰐􏰅􏰑profitable, sustainable organic growth. 􏰁􏰂􏰃􏰄􏰅􏰆􏰇􏰈􏰉􏰊􏰀􏰋􏰌􏰋􏰅􏰆􏰍􏰎􏰆􏰇􏰈􏰉􏰀􏰃􏰂􏰏􏰆􏰎􏰍􏰙􏰀􏰏􏰂􏰃􏰐􏰅Imagine working at such a company. Employees would have stable, rewarding careers... investors and industry-watchers would admire your company... and you’d irritate competitors. In the Innovation Wave, some companies will experience this growth, while others watch it. The Innovation Wave impacts future sales... so it has unlimited potential! Catch the Innovation Wave explains how companies can achieve predictable ongoing success with their R&D. Please visit www.catchtheinnovationwave.com to download this white paper or watch the two-part video. Leave a comment and share this information! Thanks for viewing!

1. Catching the Innovation Wave…
through the new science of B2B customer insight
Dan Adams
Advanced Industrial Marketing
dan.adams@aimtolead.com
www.newproductblueprinting.com
.
© AIM, Inc.

2. Current operations
Diminishing returns
Unlimited potential
Future sales
Quality Wave Productivity Wave
Profitable Sustainable
Organic Growth
1970 1980 1990 2000 2010 2020
© AIM, Inc.
The New Science of
B2B Customer Insight
100 books per week
Innovation Wave

3. Questions we will address…
1. What will change in this Wave?
2. Do B2B suppliers have an advantage?
3. What is the science of B2B customer insight?
© AIM, Inc.
Dan’s first rule of battles:
“Never be in a battle you don’t know you’re in.”

4. SellDevelopIdea Validate
Front End 25% Success Rate
Source: Cooper, Winning at New Products-3rd Ed, p. 11. © AIM, Inc.
Some Independent Research…

5. Manufacturing
(with Six Sigma Success)
New Product
Development
3 Defects per
1,000,000
Attempts
3 Defects per
4
Attempts
© AIM, Inc.
What must change?

6. Customers
1. Does your company have bright R&D people?
2. Do your competitors have bright R&D people?
3. So how will your company win?
Your
Company
Competitor
A
Competitor
B
Competitor
D
Competitor
C
What if your R&D
worked only on
problems that
truly cared about
and competitors
kept guessing
what to work on?
© AIM, Inc.

7. Problem 1. What’s the right question?
Problem 2. What’s the right answer?
What unmet needs will this market reward us to satisfy?
How can we satisfy these needs?
1. Which Problem consumes most of your innovation investment?1
2. Which Problem area leads to most new product failures?2
3. Which Problem area could be turned into a science?
Two parts to…
Market Needs
Supplier Solutions
© AIM, Inc.
1 Improving New Product Development Performance and Practices, American Productivity & Quality Center, 2003
2 The Conference Board, Adapted by Robert S. Cooper, Winning at New Products, from D. S. Hopkins & E. L. Bailey, “New Product Pressures” 1971

8. Whose Idea?
SellDevelopIdea Validate
Yours … or Your Customer’s?
Most suppliers fail to engage customers…
© AIM, Inc.

9. SellDevelopValidateIdea
Assumed market need
See if anyone buys product
Supplier
Solution
Market
Need
When do most companies understand market needs?
© AIM, Inc.

10. Questions we will address…
1. What will change in this Wave?
2. Do B2B suppliers have an advantage?
3. What is the science of B2B customer insight?
© AIM, Inc.

11. can usually offer
more insight than
B2B Customers B2C Customers
Education
Training
Time on the Job
1. Knowledge
© AIM, Inc.

12. Financial Impact
2. Interest
Personal Recognition
HERO
© AIM, Inc.
can usually offer
more insight than
B2B Customers B2C Customers

13. 3. Objectivity
Group Decisions
Procedures
Accountability
© AIM, Inc.
can usually offer
more insight than
B2B Customers B2C Customers

14. 4. Foresight
Financial Objectives
Predictable Benefits
© AIM, Inc.
can usually offer
more insight than
B2B Customers B2C Customers

15. 5. Concentration
© AIM, Inc.
Millions of Buyers
Fewer Buyers
can usually offer
more insight than
B2B Customers B2C Customers

16. Concentration
So What?
Knowledge
Interest
Objectivity
Foresight
B2B Customers are able to help
supplier design better products.
Customers are willing to help
supplier design better products.
Customer decision-making is
rational, stable & understandable.
Customers can be directly engaged
…and primed to buy later.
Customers can discuss their
needs before seeing a prototype.
© AIM, Inc.
B2B Customers B2C Customers

17. Questions we will address…
1. What will change in this Wave?
2. Do B2B suppliers have an advantage?
3. What is the science of B2B customer insight?
© AIM, Inc.
Let’s introduce 1 term and 2 principles…

18. What is a Customer “Outcome”?
Increased abrasion resistance
Faster operating speed
Reduced maintenance costs
Quicker change-over timeImproved grease resistance
Greater weight capacity
Reduced inspection frequency
Higher fill levels
Reduced roller wear
Less slippage with wet ore
1. Customer value is only created when an important, unmet outcome is improved.
2. Suppliers’ only path to profitable, sustainable growth is customer value creation.
… a desired customer end-result
© AIM, Inc.
2 Principles:

19. 19
B2B Suppliers can understand outcomes at 9 levels…
1 Uncover all outcomes
2 Understand importance
3 Define & set direction
4 Prioritize outcomes
5 Learn how to measure
6 Identify satisfaction levels
7 Measure next best alternative
8 Quantify value created
9 Quantify value captured
Conduct qualitative Discovery interviews
and project your notes.1 Uncover all outcomes
Diverge Converge
© AIM, Inc.
Ask “what else?”

20. 20
B2B Suppliers can understand outcomes at 9 levels…
1 Uncover all outcomes
2 Understand importance
3 Define & set direction
4 Prioritize outcomes
5 Learn how to measure
6 Identify satisfaction levels
7 Measure next best alternative
8 Quantify value created
9 Quantify value captured
During Discovery interviews, probe
deeply to understand why they want this.
© AIM, Inc.
1. Supplier learns more
2. Customer opens up more

21. 21
B2B Suppliers can understand outcomes at 9 levels…
1 Uncover all outcomes
2 Understand importance
3 Define & set direction
4 Prioritize outcomes
5 Learn how to measure
6 Identify satisfaction levels
7 Measure next best alternative
8 Quantify value created
9 Quantify value captured
For customer’s Top Picks, create
“outcome statements” to clarify outcome.
“Outcome Statements” were pioneered by Tony Ulwick of Strategyn© AIM, Inc.

22. 22
B2B Suppliers can understand outcomes at 9 levels…
1 Uncover all outcomes
2 Understand importance
3 Define & set direction
4 Prioritize outcomes
5 Learn how to measure
6 Identify satisfaction levels
7 Measure next best alternative
8 Quantify value created
9 Quantify value captured
During quantitative Preference interviews,
ask how Important and Satisfied…
Diverge Converge
MSG = IMP x (10 – SAT)
Ex: Avg. IMP=9; SAT=6
MSG = 9 x (10-6) = 36%
© AIM, Inc.

23. 23
B2B Suppliers can understand outcomes at 9 levels…
1 Uncover all outcomes
2 Understand importance
3 Define & set direction
4 Prioritize outcomes
5 Learn how to measure
6 Identify satisfaction levels
7 Measure next best alternative
8 Quantify value created
9 Quantify value captured
During Preference interviews, ask how
customers would measure each outcome.
1. How would you measure abrasion
resistance?
 Measure loss of belt thickness over time
when conveying DSO-grade iron ore
 Use a ball mill for lab simulations, try with
iron ore and small squares of belting
 …
With B2B customers, this is
often a very rich conversation
© AIM, Inc.

24. 24
B2B Suppliers can understand outcomes at 9 levels…
1 Uncover all outcomes
2 Understand importance
3 Define & set direction
4 Prioritize outcomes
5 Learn how to measure
6 Identify satisfaction levels
7 Measure next best alternative
8 Quantify value created
9 Quantify value captured
Then ask for “barely acceptable” and
“totally satisfied” points.
1. What would be barely acceptable?
 1 millimeter of belt thickness loss per
week
2. What would make you totally satisfied?
 No loss of belt thickness at all
This gives you all the information
you need to replicate the customer
experience in your operation.
© AIM, Inc.

25. 25
B2B Suppliers can understand outcomes at 9 levels…
1 Uncover all outcomes
2 Understand importance
3 Define & set direction
4 Prioritize outcomes
5 Learn how to measure
6 Identify satisfaction levels
7 Measure next best alternative
8 Quantify value created
9 Quantify value captured
You will be able to predict customer
reaction to all these products…
Abrasion Resistance
Maintenance Costs Belt Velocity
Grease Resist.
Belt Change Time
Weight Capacity
Your New Design
Your Old Product
Competitors
© AIM, Inc.

26. 26
B2B Suppliers can understand outcomes at 9 levels…
1 Uncover all outcomes
2 Understand importance
3 Define & set direction
4 Prioritize outcomes
5 Learn how to measure
6 Identify satisfaction levels
7 Measure next best alternative
8 Quantify value created
9 Quantify value captured
Use customer interviews and tours to
gather economic data…
Value Calculator – Acme Belt A100
Then use this economic data to create
a value calculator… to quantify the
value customers will receive.
© AIM, Inc.

27. 27
B2B Suppliers can understand outcomes at 9 levels…
1 Uncover all outcomes
2 Understand importance
3 Define & set direction
4 Prioritize outcomes
5 Learn how to measure
6 Identify satisfaction levels
7 Measure next best alternative
8 Quantify value created
9 Quantify value captured
Give value calculator to customers so
they can document benefits themselves.
Value Calculator – Acme Belt A100
Value calculators raise customers
perception of value (the ceiling)… and
help the supplier set optimum pricing.
© AIM, Inc.

28. 28
B2B Suppliers can understand outcomes at 9 levels…
1 Uncover all outcomes
2 Understand importance
3 Define & set direction
4 Prioritize outcomes
5 Learn how to measure
6 Identify satisfaction levels
7 Measure next best alternative
8 Quantify value created
9 Quantify value captured
Seem like too much bother?
1. These 4 levels alone yield great value
Control Chart
2. In the 1980’s, it seemed hard to move
from quality inspectors to statistics.
3 points…
© AIM, Inc.

29. Market
Research Discovery
Interviews
Preference
Interviews
Side-by-Side
Testing
Technical
Brainstorming
Product
Objectives
Business
Case
1 Uncover all outcomes
2 Understand importance
3 Define & set direction
4 Prioritize outcomes
5 Learn how to measure
6 Identify satisfaction levels
7 Measure next best alternative
8 Quantify value created
9 Quantify value captured
1 2 3
4 5 6
7
Probing, Top Picks
Outcome statements
1-10 IMP, SAT ratings
Recommended test method
Barely acceptable, totally satisfied
Side-by-side testing, Outside-In Score
“What else?”
Calculate customer value
Raise perceived value, set price
Value
Calculator
8 9
3. New Product Blueprinting covers all 9
© AIM, Inc.

30. B2C
Why will B2B suppliers enjoy more “science”?
Potential
Insight
It’s difficult to
predict how
consumers will
respond to non-
economic
benefits, e.g.
amusement.
Supplier ability
to predict
customer buying
behavior
B2B
100% Certainty
100% Guessing
Potential
Insight
Knowledgeable,
interested,
economically-
driven buyers
can help
suppliers design
new products
with confidence.
Typical
Insight
B2C suppliers
are consumers
themselves…
and tend to
spend liberally on
research.
Typical
Insight
Most B2B suppliers
don’t use their own
products & conduct
limited VOC
Today, this
large B2B
Insight Gap
can provide
competitive
advantage.
Small B2C
Insight Gap
© AIM
The Customer Insight Gap

31. Catching the Innovation Wave …
through the new science of B2B customer insight
Any Questions?
© AIM, Inc.
Dan Adams