Industrial Business Models – Customer ROI

Your technology is great.  It makes the world a better place.  Benchtop results were good – but yields actually went up as you’ve scaled results.  You’ve also made your first big decision and you’re going to sell the technology to others to help them sell into their end markets.  Your customers will learn the end markets, the minutiae of what drives value and how to apply your latest / greatest technology.

All you have to do is sit back and sell to them.

Have a model of customer ROI in at least one market.

This is a trap.

Even with all of the great startup guidance, literature, mentors and coaches available – a startling number of new businesses continue to believe that they can leave the heavy lifting to their future customers.  The technology is so good, they don’t even attempt to understand customer ROI.  Many established companies make this case too – but the pain of failure is much worse when you only have one product.

Visionary customers are explained in Moore’s classic on tech marketing.

There are always a few visionary customers who will do the work to find out ROI for you. Most customers will not. To get feedback, a new product must be surrounded by a body of work that supports its value to new customers. Customers don’t expect you to be an expert in their field, but they will get frustrated and share less with you if you waste their time. The effort to develop ROI and to understand your customer’s end business always pays back.

[Sometimes the payback is finding out sooner that it doesn’t work and that you should stop / pivot / change.  That’s okay too.]

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  1. Pingback: New or Better? | Fred Lybrand

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