Some CEOs wave off my idea of customer creation, saying, “That’s only for B2C.” They believe they operate in B2B commodity markets, so they cannot charge a premium for their products.
But the world has far fewer commodities than most people think. And the opportunity to charge a higher price is more common than it seems.
A subscriber, a board member at a company, once reached out to me for help. They had a board meeting coming up in a month to discuss a new growth strategy. The problem was, the team had completely run out of fresh ideas.
To paraphrase Boromir, I said that one does not simply write a strategy in a month. But I promised to see what I could do.
Revenue was growing slowly, but profit margins were shrinking. Costs were rising, so net profit at best just held steady.
The team explained that they operated in a commodity market. All competitors offered nearly identical products of similar quality and the exact same additional services.
“We work strictly according to the client’s specifications,” the team said. “We and our competitors from different countries receive the same request. The one who promises to deliver on time at the lowest price wins the contract.”
The team saw price as their only weapon. Clients played suppliers against each other, squeezing them for rock-bottom prices.
I nodded. I had faced this problem before—both as a CEO and as a consultant. I had seen it in markets like concrete, IT development, agriculture trading, B2B services, and other industries.
The team didn’t just sit back. They tried to create customised versions of the product. But these markets are like a lookalike contest—similarity is valued more than individuality. Prices had been falling for the fourth year in a row, and there was no end in sight.
There was no time for full-scale customer research with dozens of interviews. So I used a method known from psychology: Solution-Focused Brief Therapy, or SFBT.
It was developed in Milwaukee in the late 1970s. The core idea is that the therapist looks for “bright spots” in the patient’s past. These are situations where their fears, phobias, or anxieties somehow didn’t trigger, even though they should have.
We also started looking for bright spots—situations where clients, and not small or random ones, paid more. If they paid more for some reason, it is worth knowing why. And we found more of these cases than I expected.
Many people know about Maslow’s hierarchy of needs. But this famous pyramid tells you no more about actual needs than a horoscope does about your character.
It is not just that Maslow views humans as deeply selfish, wanting things only for themselves. Maslow never researched or proved his ideas. Think of it as just an opinion.
But another scientist, Steven Reiss, conducted a major study. He proved that all people, regardless of any other factors, are driven by 16 basic needs:
Acceptance – the need to be appreciated
Curiosity, the need to gain knowledge
Eating, the need for food
Family, the need to take care of one’s offsprings and spouses
Honor, the need to be faithful to the customary values of an individual’s ethnic group, family, or clan
Idealism, the need for social justice
Independence, the need to be distinct and self-reliant
Order, the need for prepared, established, and conventional environments
Physical activity, the need for work out of the body
Power, the need for control of will
Romance, the need for mating or sex
Saving, the need to accumulate something
Social contact, the need for relationships with others
Social status, the need for social significance
Tranquility, the need to be secure and protected, to save time, effort, and energy
Vengeance, the need to strike back against another person
Whatever people do, at any given moment they are driven by one or more basic needs. Your annoying neighbour, your lazy employee, your friends, and even internet trolls are all looking for ways to satisfy their needs. And your clients are no exception.
I use Reiss’s theory in my Customer-Axis Framework to develop strategies and create new products for clients.
“Okay, maybe,” clients often tell me. “This theory might work if you sell smartphones, sneakers, or soft drinks. But we sell steel, freight, and accounting audits. We work in B2B markets. This doesn’t apply to us.”
They are wrong. Even if you sell bricks, spare parts for industrial equipment, AI agents or excavators, people make the buying decisions. And when people come to work, they cannot just take off their personality like a jacket and hang it in a closet until the end of the day.
If you know other CEOs who would find it useful to join this club, just forward them this email. And if you are the CEO someone shared this with, you can subscribe for free here:
When you work with B2B clients, you need to remember that several people are usually involved in making decisions. There is also always “the power behind the throne”—people who influence the final choice, even if they have no official authority.
But these people—whether they are on the throne or behind it—are just human. And nothing human is alien to them.
They look for tranquility—they do not want to worry about delayed deliveries or poor quality from your side.
They think about their social status within their company.
They want acceptance from their management and colleagues.
They are often curious and love learning new things.
The need for order is also important to them—they expect you to follow the contract perfectly and deliver a high-quality product.
And, after all, they want to earn more money.
If your offer not only meets their specifications but also helps them satisfy their personal needs, believe me—they will choose you.
And they will gladly pay you more.
Otherwise, you will have to use questionable tricks to increase your margins.
The Customer-Axis Framework helps you first create value for your clients, and then capture value from them for your business. The more value you create, the more value you can capture—in the form of a higher price (read more here, watch more here, or download a PDF here).
But you can’t create more value simply by following specifications. You need to find out who influences decisions—both from the ‘throne’ and from behind it—and study their needs.
You can do this both to develop your strategy—like I did in that case—and to increase your business margins.
In that case, we found that the few clients who paid more for extra product modifications shared common traits:
The CEO personally made the decision.
All these companies operated in a few industries with similar features.
All these clients created their specifications before they started collecting offers, not after.
All these clients had specific problems that my client’s product could solve perfectly.
These clients had other common traits too, but I cannot share them without breaking the NDA.
As I said before, we did not have time for major client research. But we did talk to a few clients who were willing to pay more. These interviews helped us see that there are many similar clients out there, and they helped us create a foundation for strategic growth. We recently had a call with that board member—margins are growing steadily, and the number of clients is too.
Companies like U.S. Silica, Weyerhaeuser, Perdue Farms, and CEMEX also operated in markets where products were almost identical. But then they followed the same path—and succeeded.
This is further proof that you can create customers in any market.
Checklist:
How well does your sales team know the people making buying decisions, both on the “throne” and “behind the throne”?
How deeply do they understand the situation within their organisations?
Do your employees know the strategies of the organisations you work with?
During negotiations, are you talking to the person who actually makes the decisions?
What do you know about their needs?
Who systematically collects data on client needs in your organisation?
When you try to customise a product in a market you consider “commoditised,” do you rely on your own ideas about client needs, or do you conduct interviews?
For paid club members, I will share another way to look at the problem of commoditised markets at the very end of this article. Just a reminder that paid members can contact me for short consultations. Upgrade to paid here:
But even if you are a free subscriber, you can still ask me a question. If it is interesting, I will answer it in one of my upcoming newsletters:
I set up a poll on a third website, and very few people voted. So, I am bringing the polls back here. I will share the results next time.
If you work in the B2B market and need to develop a strategy with a strong competitive advantage, just reply to this email. I take on a few of these projects every year. Read more here or here.
Comments
Nothing yet. Say the first thing.
Sign in to join the conversation.