164 | MARTIN HURYCH | HOW TO MAKE A CUSTOMER CHOOSE YOU

Martin Hurych | Founder @ Business Accelerator s.r.o

"Jesus, he's an asshole."

Admit it, how many times has this line slipped your mind when evaluating your potential client and their reaction to your upcoming offer? How is it possible that he hasn't grasped your genius?

I'm going to disappoint you. He doesn't care about you. If you were in his shoes, you'd act the same way.

This is exactly what I explain over and over again to my clients. And not just to them. And it's because of that frequency that I decided to do a solo episode this time, where I look at the whole problem in a little more detail. In the episode, I'll discuss...

🔸 What is the perceived added value?

🔸 What is the B2B value pyramid?

🔸 How does the pyramid work?

🔸 How to build added value?

🔸 How to work with the value pyramid?

HOW TO MAKE THE CUSTOMER CHOOSE YOU (INTERVIEW TRANSCRIPT)

Martin Hurych

Hello. I'm Martin Hurych and this is another Zážeh. I have a solo episode for you today, but before I reveal the topic, I have a request for you. Subscribe or at least like right now. Especially if you subscribe, we both win. You won't miss any more episodes and you'll help me navigate the social media algorithms more smoothly so I can get the word out about Ignition to a much wider audience.

When have you ever thought that a customer is a de**l?

Today I would like to discuss customer value with you once again for the umpteenth time. Admit it, when was the last time you thought or thought of a potential customer as a proper asshole. When was the last time it ran through your head as a justification for your failure that a potential customer has better and longer term relationships with your competitors? When did it piss you off that he wasn't responding to your emails? When did you discuss in a meeting that while the customer likes your solution, they don't have the budget for it? When have you accused him of maybe taking bribes and the competition, unlike you, is cheerfully giving bribes? When have you scolded that your solution or offer is absolutely divine but has no chance of success because the asshole on the other side isn't looking at anything but price? In that case, I have bad news for you, and I've said it here on the Ignition a few times as well. Your potential customer doesn't give a damn about you personally or your company, because all your customer cares about is solving their own personal shit.

As I've been going through companies for at least the last three quarters of a year, I'm finding that companies that don't understand this shift have nothing to plug into thanks to the various crises that have been going on for a long time, are losing jobs, and it has nothing to do with the price they're offering. The companies that have understood it, on the other hand, are now flying and don't know where to jump first.

What is the perceived added value?

The difference between the two cases is the perceived value. We all know that we are supposed to talk about value, we are supposed to build value for the customer, we are trained in that as marketers and owners. Materials from abroad tell us to build value primarily around ROI, savings or conversely additional sales.

At last year's B2B conference, I showed two different triangles. There are undoubtedly positions in a company where the most important thing is to really be concerned about potential savings in production, increasing profits, increasing margins, reducing production times or saving human resources. Here you can think of the owner, the CFO or the CEO of a company. However, there are also people in the company who throw poop on these values from on high. That's because their primary subjectively perceived value is your help, for example, your help getting that software up and running, delivering your service, training their people on the new technology. These people don't care in the first place whether or not their company makes a profit on it. They are primarily interested in whether someone will yell at them if they fail, whether someone will praise them if they succeed, and whether they can deliver the project on time, to quality, and on budget. We tend to forget this and we need to realize that we are often giving these people problems if we are trying to sell something to the company. My experience is that if I am aware of these things, if I make it clear in our sales conversations and I know what their situation is and I can find a solution for them, then those conversations are much easier. That's because I try to offer all the decision makers or stakeholders in the company personalized value that is perceived and unadulterated by the other side. I have to say that I meet very few marketers who can do this. Most of the time, we've learned from some training, from product lectures on one or two mustras and we don't care what the other person thinks. That's where very often these business conversations collapse.

What is the B2B value pyramid and how does it work?

It is good to realize on a human level why this is so. Probably most of you are familiar with Maslow's pyramid of values, it's a 1943 model, it's the famous Abraham Harold Maslow pyramid. I'm not a specialist, but supposedly it's a model that has never been fully approved or tested, but it's very often used because it explains on a very simple basis how we behave as humans.I'm sure you know that the first level is the physiological needs, where I need a good night's sleep, a good meal, I need somewhere safe, ideally warm, and occasionally I have some reproductive urges. If that level is fulfilled, I can move up a level where I'm talking about the needs of home and work security, health, moving beyond pure survival in those values. If I also have a home, some comfort, some warmth, some health, then I can move up a level where I become interested in other people, and that's terribly interesting. Think of the pyramid as a very selfish pyramid where I am always the center. If it's not just about me anymore, I want other people to like me, I try to get my family to like me, some wider community, my friends at work. I don't so much do it for them, I do it permanently for me. If I'm somehow already established in that community, then again I'm very selfishly demanding recognition from that community. If I've got a career, I've got recognition, I've got my ego filled, so I look at how I can help the world around me. I will also add here, very controversially, that I do it not so much because I want to help the world, but because it makes me feel good to help the world. I know that this may be a very confrontational description of Maslow's pyramid, but I do it deliberately so that we understand one thing. We basically behave exactly the same at work as we do at home, and there is no reason why this de facto pyramid shouldn't apply in our personal professional version.

With this in mind, a 2018 survey was conducted at Bain & Company, the world's largest consulting firm. You can see this survey on Harvard Business Review, for example, it's pretty much named as the B2B customer value pyramid. The three researchers tried to stack up into a pyramid shape the components that we as people working in B2B actually value and what we give them subjective weight. This pyramid will be available for download as a bonus of this podcast, so if you're interested, be sure to download it. I'm just going to describe it here in a simplified format so you can understand how it's really practically no different than our private pyramid.

When you are trying to buy something in B2B business, the first thing you are interested in are the basic parameters, the qualification parameters of what you are buying. That definitely includes technical parameters, definitely some sort of frame price because you have a frame price expectation. It also includes legal and ethical aspects, if I want, for example, a certified item, I want an item from a certified partner. The moment you meet that as a potential supplier, I'm saying here with full weight that the qualification level is not really the issue any more, and I'll give you a little proof of that in a moment. What is above the qualification level we can call functional values or functional parameters where we are talking about whether or not what the other party is potentially buying is actually going to help them with their business.

We will increase turnover, reduce costs, save people, save machine hours and so on. What's most interesting about the pyramid is the middle level, the third level, which talks about the ease of doing business. Here we're talking about how easy it is to communicate with you, how flexible you are in meeting requirements, whether what you're offering is flexible enough so that the company that buys your service or product, that particular thing serves their goals. It's about whether you're professional enough, whether you're stable enough, whether you're in danger of going out of business in 2, 3 years. That's the level where you can finish second in the tender, but they won't completely tell you the reason. Often off the record, they'll tell you that they were afraid you were just a small company or a startup and they are simply afraid to let you take on such a big contract because they are afraid you can't handle it. The fourth level is very interesting and often overlooked. That's where it comes down to what's in it for me. This level is important for people who are somehow personally associated in the potential customer's company with the particular project you're trying to do with them. Here we're talking about whether it's going to be a bust and it's going to be blamed on Franta because he led the whole project, or if it's going to be a total success and somebody's going to praise him. This is also where things like whether the experience gained through this project will help me in my career growth, whether I can potentially sell it on my CV if I change the company. That last level is important for senior management, for owners and directors. Here we are talking about whether our companies have a similar vision, whether they have similar ethical standards, whether we see the world in a similar way.

How to build added value?

Why do I give this pyramid so much weight? Because it turns out that examining it is terribly important in how to construct value for the counterparty, for each individual. Before I make a small digression, I will reiterate in a few points how such value is constructed. I'm sure it's not new to you because the standard talk is that you shouldn't shoot value from the hip. You should ask questions, you should certainly ask questions in detail, and you should have a genuine human interest in digging deep for the reasons behind the answers they give you. Some of you may be familiar with root cause analysis, so definitely use the five whys and try to dig into why they're telling you what they're telling you. Use open sources a lot, I don't just mean ChatGPT or websites now, or the databases that we have in the country, definitely draw on other materials that the company says about itself. For example, the company's annual reports are very interesting, especially if you talk to the owner or senior management. You'll see how surprised they are that anyone reads these materials at all and how much you know about their company, and I guarantee you'll know more about the company than their own employees do.

If you really want to build that value in some coordinated way and not just shoot, I'll give a variation here and that's the detour. Try wading into the blue ocean, there's already been an episode here on Ignition about the blue ocean as well, and more than one. Try using the second tool from the blue ocean strategy, which in English is called a buyer utility map. In Czech, I translated it as buying cycle mapping, where you use a simple spreadsheet to build a map of the bottlenecks or problems in using that product or service within the customer's organization. It turns out that every company focuses a lot on the buying phase, maybe the implementation phase, but we often forget about what the customer is actually going to experience with our product or service while they're using it. What's going to jump out at them when they want to leave that service, because they might outgrow that service? These are the unsuspected opportunities to find what is really bothering that person to buy our service or product. So I suggest you check out the blog or the book or listen to one of the earlier solo episodes that was dedicated to this exact topic.

The conclusion of this exploration should be what specific activities fall into what phase of that use, why the person does them and what they get out of it. To figure this out, ask basically two very simple questions. The first one might be what it is about that phase that annoys them. What pisses you off about maintaining this software? But maybe an even more important question is why does it annoy them, why did that person punch that particular thing out. In that coordinated way, you can build a value or a value proposition that you can offer to every single stakeholder in the company. Just to remind you for the sake of completeness, we're talking about anywhere from 5 to 12 stakeholders as a standard in technical professions, but there could be a s many as 20 decision makers. You should get around to at least the main ones, because you can't get by with one 100%.

How to work with the pyramid of values?

Going back to the pyramid, it's good to meet the qualifying conditions, of course, the base of the pyramid, the pedestal. Logically, if I don't meet the basic qualification criteria, I won't be allowed to enter the competition. What is important and what is visible, for example, on LinkedIn from the other side, from the buyers, a lot of companies try to artificially push us to the lowest level. They are deliberately trying to talk only about those qualification criteria because if they succeed, we are talking about a commodity that has no added value. At that point, really, the only parameter you have left in the discussion is price. So a lot of companies try to act like they don't care about anything else, but it's good to investigate because it turns out that that's not really the way it is. So try to climb as high up the pyramid as you can. The vast majority of salespeople and often marketers stay in the first two levels. In the United States, shortly before Covid, they did a survey in a very competitive and very commodity market where they asked buyers buying IT infrastructure, cabling, very unsexy products. I don't think there's anything very interesting about connectors, cabling, routers from an amateur position and that's how those buyers saw it. When those buyers were asked what would be the deciding parameter, they of course put price first. But then, when they were asked a slightly different question about what they really valued about the supplier and why they were choosing them, ironically, price was not in the top 10 at all. The vast majority of those things were from that third category, ease of doing business, how you communicate, how you can immerse yourself in internal processes, whether you are flexible. Within those top 10, there were a couple of things from that fourth category, what's in it for me if I'm going to be in trouble. Once you park into a certain budget expectation, then price didn't play a role at all.

So how should I treat the pyramid? I like to say that a good businessman is a good climber because he should try to climb the pyramid as high as possible. Because the higher up you get in that pyramid, the more subjective the parameters of that collaboration you are judging, and the higher the price of the service or product being delivered to that counterparty. They paint those dollars, euros, or crowns that they attribute to it because they see what your service does for them extra beyond those qualifiers. It also makes them more engaged and loyal in advocating for that solution of yours, in any tenders or any decision making committees. These people, if it's absolutely the worst and you really have to go through the selection process, they'll at least give you a chance for some last call and keep you informed about what's going on in that selection process. Most of my customers don't even get to that stage. It can be proven that the more loyal the customer and the more subjective value attributed to that solution of yours, the higher your margin can be. Those companies that are buying are aware of this and often try to push you back down the pyramid, kicking you down and trying to make the whole discussion about qualification. Those are the junior buyers, those are the Excels, those are the green glowing savings percentages somewhere down on the bottom right that those buyers are rated on. I don't mean that in a bad way at all, it's their job, they basically have to behave that way, they want you as a commodity supplier. But we have to make sure they see us as a strategic partner and not just a supplier.

Summary

What to take home from this episode? Be sure to try to understand the counterparty's buying process in detail. Write down all of the decision makers and try to use that coordinated approach that I've presented here today to find the value add that the other side really appreciates and perceives. Because if you're just shooting and maybe you come from meeting to meeting where you're in a similar position and you're trying to refer to that previous buyer or technologist or engineer or owner, it may not be enough. Really get confirmation that what you're proposing is actually perceived by that particular party to be of value to that particular person that's currently sitting across from you.

If they don't respond, you basically have two chances, either you have to start from the beginning or you have to admit in all fairness that maybe they're not quite the customer for you, I'll leave that up to you of course. Either way, none of them are assholes. Every customer has reasons for their behavior and it's purely up to us to understand those reasons and if we don't understand them, it's not the customer's problem, it's our problem. So if you want to sell, stick to the following three words. Understand, enthuse and then sell.

That was all of tonight's episode. If I've sparked something in you, left an idea in your head, you've scribbled on a notepad, or you've written something down on your computer, then this episode was definitely worthwhile and I did my job well. If that's the case, I'm going to ask you again for a like or ideally a subscription so I can get Ignition in front of more listeners and viewers as great as you. Be sure to check out www.martinhurych.com/zazeh, where the bonus is already lit for this episode at the moment. Just a reminder that the bonus is the pyramid in question. I have no choice but to keep my fingers crossed, wish you success and invite you to be the next guest, thank you.

(automatically transcribed by Beey.io, translated by DeepL.com, edited and shortened)