Big-League Customer Advises Bush-League Vendor

Sudden growth is rarely a smooth ride, especially for a boot-strapped venture. Well past their fifth year in business, one small custom manufacturer serendipitously developed a product that met a real need in a niche market populated by industry giants. The vendor’s new customers were used to buying from large, well-managed firms. As a custom manufacturer, this company had the freedom to focus on one customer per product. It wasn’t yet clear to them that they had entered into a phase of development where the signs of professional management would be taken for granted by customers. In this case study, a frustrated customer advises the vendor to learn how to manage their resources to simultaneously (and seamlessly) complete commitments made to past customers and start projects for new customers.

This is one in a series of case studies highlighting “Key Questions and Course-correcting Quotes” taken from 20 years of B2B customer insight projects. All names are fictitious, but the situations are real. Case studies paint a picture of how important it is to learn what your B2B customers think–but aren’t saying. These are real-world examples of how soliciting and acting on customer feedback has helped companies hold onto customers longer, grow relationships bigger and pick up new business faster.

Case study: Pssst! Your Bootstraps Are Showing

Key Question (asked of a VP–the vendor’s chief contact in a 6-figure relationship):

VP: “This vendor’s president was badly criticized by customers who attended last year’s trade show. He changed how his company prioritizes customer issues. Do they now seem to be on the right track, or are they overlooking a blind spot that’s obvious to you?”

Course-correcting Quote:

“Their president has to get his organizational structure in place and build a senior management team. He has a bandwidth problem. On the one hand, he hasn’t delivered on all his outstanding obligations to his existing customers. On the other, he needs to make enough sales to keep his company afloat. They need to learn not to make contractual commitments for products that take resources away from their existing obligations. Reality for a small company like that is, you have to make the big sale. It takes a lot of discipline to not over-commit. They need to get a better handle on their existing staff’s capacity.”

My Client’s Quandary:

This $7 million vendor had a product that Fortune 50 companies were interested in, but the company was having growing pains. Their founder knew how to design and develop new products, but he didn’t have a lot of management training or experience. His senior managers were two of his buddies with the same technical background and lack of management experience. His company was at risk of being marginalized by a stronger competitor as soon as someone else developed a decent competing product.

More immediately, the president would be facing his customers at an upcoming trade show. He had been badly pilloried a year earlier. Before risking that again, he wanted a customer relationship consultant to conduct deep-dive interviews with his customers and expose the themes and patterns that would clarify which decisions he needed to make.

Conclusion:

Several of his customers gave similar feedback. My recommendation: Acquire experienced outside talent to manage operational and customer-facing functions. He hired the experienced talent he needed, held onto his customers, attracted funding, grew the company to serve additional niche markets, and eventually found a strategic buyer. Honest feedback from his customers helped him find his way and achieve his vision.

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