A Conversation With Tristan Kromer on B2B vs. B2C Customer Acquisition Challenges

Direct download from http://traffic.libsyn.com/skmurphy/Tristan_Sean_6-13-14b.mp3

Here is a rough transcript of the first five minutes or so to give you a flavor, I think you will find it interesting if you are wrestling with customer development or customer validation in an early market:

Sean: I am sitting here today with Tristan Kromer, we are going to talk about the differences between B2B an B2C customer acquisition methods.

Tristan: some consumer startups seem to latch onto a particular technique and apply it regardless of context. I am really interested in the different approaches you can use to find B2B customers and where the differences are between selling to consumer, small business, and enterprise.

Sean: B2B outreach–where the price point or deal value is above $5-10,000–is more tailored or artisanal. Consumer startups feel this pressure to move to more scalable methods much earlier. I know one piece of advice you offer regardless of whether it’s consumer or business is to have conversations with prospects on an ongoing basis.

Tristan: always start face to face, even for consumer. What the consumer folks may call a “manual process.” Because that’s a much more rapid form of connect. Even if you want to have a highly automated sales process, you believe that consumers will see your hero image and read your FAQ and click on the purchase button, that’s a sales process. Your face to face conversation can be roughly analogous: demonstrate the the value proposition, answer questions and then you have an ask. By doing that face to face, analog vs. digital so to speak, you get a lot more feedback and can see when the prospect smiles, frowns, looks confused, etc.. You can apply that feedback to your digital process. For example, when I use this language consistently  it’s getting a much better response. Let me try that on a landing page.

Sean: there is a desire to create scale, to create the digital process, right away. For me it’s much harder to learn from when you have a lot of unknowns. The odd thing is that B2B stays more personal because above a certain deal size you cannot assume you can avoid a negotiation to be able to get the business. There are going to be several serious conversations and at least one serious negotiating session where the value of the transaction is above $10,000.

Tristan: there is also a bias to a longer term relationship on the large dollar B2B purchase. There is an expectation of support that is often not there in a smaller consumer purchase. There is a sense of “you are going to be guy we deal with when we have problems or renew.”

Sean: yes the salesperson has to be viewed as a point of service and as providing value. Your point about a “bias to a long term relationship” was a good one: I think the enduring consumer brands pay a lot of attention to that as well. With startup sometimes there is so much focus on the ramp that sometimes unfortunately less attention is paid to reputation, brand, social capital, whatever you want to call it. It’s not so much “we have cool logo” but “our cool logo represents a promise that people can depend on.”

Tristan: I agree: it’s two different things. It’s esthetics vs. trust. You have repeated interactions with the firm and now you can trust them. I have recently been doing some work with large brands and it’s amazing the impact that a trusted brand has on conversations with customers. There is an automatic assumption that it’s going to be a serious conversation.

Sean: does that work against experimentation? Because they feel that they are carrying the brand they don’t want to be “too experimental?”

Tristan: it opens doors and you can have conversations that startups find much more difficult to secure. So there can be a bias towards a false positive. But as least you are having conversations you can learn from instead of trying to have conversations. I think you can be aware of the bias and manage for it. But there is fear of failure, but you can compensate for that with “off brand” tests where you don’t identify the brand.

Sean: we don’t do as much “I am from IBM” as “Charlie recommended that we speak to you” and they can check with Charlie and he will confirm it. Or I am a member of this community, I have presented at this conference, I have taken part in this working group. There is a brand effect for smaller startups, but it’s predicated on prior accomplishments or prior
relationships that can be re-activated or leveraged.

Here are some other interesting interviews with Tristan:

• Outlier Magazine: Interview with Grasshopper Herder Tristan Kromer (Mar-28-2013)
• Outlier on Air: Tristan Kromer a Lean Approach to Business [Audio] (Dec-12-2013)
• Tristan Kromer: Your MVP Sucks and Here is What to Do About It
  Here are some key points I took away from the interview.
  MVP has become pseudonym for prototype but It’s not just the thing you build first. It’s an experiment designed to test something. It’s the minimum thing you need to build to maximize validated learning. It can be concierge test, landing page, customer interviews, etc.. A lo fi MVP is what we used to call vaporware, a product that looks like it might exist MVP has to deliver value in exchange for attention or dollars. Four key elements an MVP can test: customer, channel, value proposition, and relationships.
• Tristan Kromer: You Can Tell a Good Advisor By Their Questions 
• Tristan Kromer: Startups, Go Out and Talk to Your Customers!
  Key quote: “You need a team to keep you honest, to keep you humble, to give a different perspective on a problem, to question your assumptions, and to provide support when things look bad.”  Tristan Kromer
• Moves the Needle Lean Lunch with Tristan Kromer

  (June 17, 2014)