B2B Growth Marketing: New BtoB Revenue & Profit

I attended a very interesting PDMA-sponsored seminar Wednesday night: Hard Services, Soft Products – Today’s Product Development Reality. The guys at Group 1066 in New York had creative innovation examples. Products enhanced with services. Services enhanced with products. And lots of blurring in between. Plus a nice framework to help our thinking.

Adding value to products with services

A classic example is IBM. Everyone knows IBM has moved from hardware / software to services. Quicken added bank downloads and other service features to QuickBooks. Partnering with MasterCard enabled this service and potentially leveraged two brands. In a different space, GAF provides website information about roof shingles for consumers even though they sell to distributors. By linking the type of warranty to the certification level of the installer, they incent consumers to look for a highly-trained distributor. And provide the installer incentives to use GAF.

Adding value to services with products

“Make the service tangible” is a mantra we’ve all heard. Services are typically invisible, so adding “hard” deliverables adds value. My favorite example cited by Mike Megalli is Salesforce.com. Software on users’ screens can feel impersonal (as a former user, that was my impression). With “networking” sessions for users in major locations, they make the experience personal—and add value. Salesforce.com benefits from product feedback and the “free training” users provide to each other.

Do product companies know services? And visa versa?

Group discussion highlighted the execution risks associated with these good ideas. Panasonic’s Concierge service intended to differentiate their flat screens fell flat for one person when it took 20 minutes to reach a person—who wasn’t qualified to solve the problem. In my experience, product companies frequently under-estimate the effort required to deliver good service. They may not treat it like an integral part of the product. The solution: full-blown new product development attention, even though we are launching a service, not a product.

Of course, the reverse is true. Service companies aren’t used to delivering tangible goods. The early days of the wireless business found telco’s struggling to deliver and service cell phones. In today’s world, telco’s and cable companies must deliver ever-smarter devices with software downloads, accessories, etc.

These are the technology-enabled challenges many of us face in 2007.

Thanks PDMA and Group 1066!