What is the difference between a cookbook of recipes and tips/secrets by a top chef, and the stuff you turn out at home using the book?
Usually a fair bit, surprising really when you have all the information necessary to create and present the dish to hand.
The difference is not the Intellectual Property reflected in the cookbook, the stuff that gets written down, it is the Intellectual Capital of the chef, what is between his ears that cannot be adequately reflected in just words and pictures, but just “happens”.
Same in business.
I have an occasional client that sells technical flavor and texture enhancing products to an industry niche. They are a successful and long lived business, increasingly struggling in a world that they seem not to understand despite the brainpower in the labs.
They have a fancy website that tells you nothing, not even the basis of the recipes to continue the metaphor. In their mind, the “recipes” of technical ingredients are their intellectual property, not to be given out to their customers and competitors under any circumstances.
However, their customers all have a pretty good idea of the “recipes”, they are trained in “recipe” generation, they just lack the nuanced understanding of the real detail, the stuff that is between the ears of a few of my occasional clients employees. Their competitors are unlikely to learn anything they do not already know, they have their own “chefs”, and their own Intellectual Capital that they set out to leverage with customers. The real competitive arena is not the recipes themselves, but the value they add to their customers operational processes, and the outcomes in their consumers mouths when they get to taste the finished products.
Net result of this Neanderthal view of the digital world is that nobody comes to them via their website, or other digital means. They wonder why and conclude that this digital marketing is just a stunt brought on by shysters who do not know anything about the technology they are so proud of, which they believe is so good that it must just sell itself.
Bullshit.
Their products are now almost commoditised, at least to the recipe level.
To sell nowadays, you must demonstrate that not only do you know the recipe, but that when the dish comes together, it really is something special.
Where the business model means the customers have to pay for technical advice (however it has been delivered) through purchase of a product such as an ingredient, it only works if the said product has significant unique elements that generic competitors cannot copy or just neutralise by lower prices. In general, people don’t value what it takes to have the technical knowledge.
🙂
Hi Phil,
I partly agree with you.
Where customers have got used to getting the technical skills of their suppliers for free, it is very hard to move them away from that model, but that is what marketing is for.
Buyers focus on price mainly because it is easy for them, a seemingly objective way of distinguishing between suppliers. However, in any product with a technical component, there has to be grounds for the creation of value by means other than just fighting to win the order by being cheapest.
Some customers will always buy just on price, not recognising any other parameters of value, and they are usually really good customers for your competitors to have, while you concentrate on the ones who value the skills you can bring to the table that actually solve their problems and reduce costs, increase their productivity, or increase their sales.
Hi Al, I can almost hear your teeth grinding. Perhaps you should rename your blog: “The Grumpy Marketer”. 🙂 Honestly, there seems little doubt that this “successful and long-lived” business will be swept aside as if it never existed — its passing will not make the slightest bit of difference to the food taste and texture enhancement industry. On the upside, those people with the knowledge ‘between their ears’ will take it with them. It is often the case the when a hidebound company breaks up, it releases the energy of its people. Process stifles creativity. If I were you, I’d be talking to the energetic individuals in that business who will soon be without a job. Instead of one “occasional” client, you could find yourself with a handful of entrepreneurs!
Hi Lyn,
It is true to call them an occasional client, but also true to call them an ex occasional client, as I have little hope of more from them.
There are a number of people I have met at some time who understand the need for change, but the ingrained culture is just so, so strong, and for change you need the CEO to endorse it.
At least I get a post out of it!
fat chance.