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Disrupting B2B Markets Does Not Happen Overnight

by Hank Barnes  |  August 19, 2014  |  Submit a Comment

Market disruption.

Those two words are extremely powerful and a goal for many technology providers.   Successfully disrupting existing markets give you an opportunity to rewrite the rules, create new categories, and drive tremendous growth.

At the same time, it happens a lot less than provide marketing hyperbole would like you to believe. My colleague John Lovelock and I have recently published research (subscription required) that builds off of John’s earlier look at how disruptions impact markets in term of adoption curves and forecasts. One of the key recommendations we make is to avoid making claims of disruption if it is really not the case.   It just leaves buyers doubting you, and makes trust harder to build and keep.

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To truly disrupt markets, John’s research found that  three patterns of buying must occur.  The first is true of all technologies-competitive, i.e. simply competing for business against others in the market for buyer projects.   The second two, however, are less common and when both occur, you truly have a disruptive product.

The first is additive purchases, meaning that your product is so distinctive that buyers who had effectively not participated in the market, either deciding to wait for something better or just feeling they would never buy that type of product, become customers.   Often this is driven by either a price/performance breakthrough or incredible customer experience.

The second is destructive purchases.  While the name may be a bit dramatic, it really is about innovations that are so compelling that you replace your existing approach to solve the problem ahead of schedule, e.g. before you have amortized the full value (in the B2B world).

Market disruptions often start in consumer markets, since price points are often lower and the decision to replace is more discretionary.   In the B2B world, most innovations have implications far beyond the purchase.  People have to be retrained, systems have to be updated, processes have to be adapted, and more.   Additionally, in the destructive phase, someone (often the person who made the original purchase recommendation) has to make the case for early replacement.   That is not an easy position to take, with its significant political ramifications.

When you look at all these factors, you can see why B2B disruptions often take several years before they reach critical mass.   This should be reflected in your strategies.   Progress is critical, but focus on the best way to achieve that progress.   Get some wins from traditional competitive procurements.  Target new buyers that have been on the sidelines since there is less emotional and organizational “baggage.”  For destructive opportunities, focus your energies on one or two competitors and implement strategies to ease the transition from them to you.

Once you move out of the disruptive phase (when all buying becomes competitive), you’ll be in a strong position to lead the market and grow successfully.

Additional Resources

Category: future-of-sales  go-to-market  

Tags: additive  destructive  market-disruption  replacement  

Hank Barnes
VP Distinguished Analyst
6+ years at Gartner
30+ years IT Industry

Hank Barnes explores the dynamics, challenges, and frustrations enterprises face when buying technology products and services. Using that customer-centric lens, he advises those responsible for marketing technology products and services, general managers responsible for product portfolios, and startup CEOs on next practices to drive success for their customers and their business. Read Full Bio




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