Some of the highest-impact disruptors in the last few decades haven’t really been technology innovations. They’ve been business model innovations.
Think about it: Uber, Airbnb, Peloton, Netflix, Salesforce. Did they actually invent any new tech that didn’t already exist?
We already had smartphones, apps, maps, GPS, messaging, booking, ratings/reviews, CRM and content merchandising software. And we already had taxis and hotels and movies and bicycles.
Uber, Airnbnb (et al) just combined them into new businesses. Into new kinds of businesses.
So marketing these new things wasn’t just about selling a cool way to get around town or discover places to stay—it was about evangelizing the new model. The new way to create value (and make money).
The brief is clear: once prospects understand the new model, they get the essence of the brand narrative. So laser-focusing on that job is the thing to do.
Brands whose disruption is based on business model innovation benefit from some powerful advantages—and a few pitfalls too. If your company has a new model (not just new products or services), it really pays to understand the marketing implications. First, the pretty big upside:
The New Model dividends
If you’re a business model innovator, you’ve got some real advantages:
To a lot of people (like me), new models are inherently interesting. They make people slow down and ask, “What’s going on here? What are these guys doing differently?”. Yes, a tech breakthrough can give you a similar effect but new tech claims are over-claimed, noisy and bullshit-bound (The Boswellox Barrier). New models are pretty transparent: you can see what’s new about it or you can’t.
Source of value that no one else has
New models unlock new value. That’s the whole point. And it’s often value that other companies can’t get to—their old models don’t let them. In tech, that kind of ‘moat’ is rare. You’d be crazy not to jump in and swim around.
A built-in reason to believe your claims
Most marketing just throws their benefits in people’s faces—as if simply claiming them was somehow proving them. A new business model is a reason to believe all those great benefits.
Once people get your new model, they can see how you’re able to deliver the new value. Having a clear ‘how’ makes claims way more credible. (“They’re cheaper than cabs because they exploit the fuck out of drivers! Where do I sign?”).
A new competitive frame
This one is huge. If people get that this is a new model, and they understand it, you’re on a very short shortlist (a list that may only have one vendor on it). And, even if there are other vendors with a similar model, the brand that educates them on it usually moves to the top of that shortlist.
But if they don‘t get that you have a new model—or don’t understand it—you’ll be compared to all the wrong vendors, using yardsticks that are unfavourable to you.
The New Model penalties
Having a new business model isn’t all roses and… cream cheese. There’s a downside too:
An education challenge
New models can be hard to understand. The boxes that already exist in people’s minds have labels on them, like “Bagel Shop” or “Supply Chain Management Software”.
To sell your Home Bagel Kit Subscription or Supply Chain Management Blockchain, you need to show them what you’re not before you can show them how you’re different. That’s an extra layer of work for you and your prospects. (The alternative, though—trying to sell advantages without a ‘how’ attached—is even more work).
A budgeting challenge
New models often need to seek new budgets and different buying teams in an organisation. Sometimes that works in your favour (when you can skip around a blocking stakeholder type); but it can also slow down buying cycles and make you over-dependent on finding motivated champions with capes and, like, Change Management as a superpower.
A perceived risk challenge
In buying journeys, every Unknown triggers a whole cluster of anxieties. A new business model could awaken the neurotics, skeptics and cynics in every company—the folks who are 100% sure that the new model is flawed and will fail (“CRM in the Cloud? Yeah right. Security much?”). They’re hard to argue with because the model is new (also because they’re jerks).
Cool examples of B2B business model innovation
Not sure why, but we’ve had a lot of clients whose differentiation comes down to a new business model. A few examples:
Paddle isn’t just a payments platform, it’s a Merchant of Record
We love Paddle, the fast-growing innovator taking on the payments giants by thinking different(ly).
Instead of just giving their SaaS company customers some software to help them sell globally, they become the Merchant of Record. They’ve already tax-registered in a bunch of countries and they understand the compliance regimes—so Paddle customers can just say “Let us sell in Latvia, please” and it’s done.
The MoR model creates the advantages.
Spreetail isn’t a warehouse or agency play, it’s an Ecommerce Marketplace Partner.
Spreetail is SUCH a great story and the awesomest company you never heard of. Instead of just helping manufacturers sell their products on Amazon, they BUY THE PRODUCTS IN BULK, put them in their own warehouses, then optimise them for sale them across 15+ e-marketplaces (like Amazon, Walmart, Target…). So you can be a Prime retailer on Amazon (with one- or two-day delivery) without having to warehouse yourself.
There’s a hundred other things to admire about Spreetail but the innovative model is the killer. So they lead with it in their marketing. The home page’s main job is to explain the model. Once you get that, you want it.
Deazy isn’t a freelance marketplace, it’s a… whole new thing.
Deazy is a great UK success story that’s changing the way companies overcome one of the biggest obstacles to growth: finding the right tech talent.
They’re not a freelance marketplace. They’re not an agency or consultant. They’re not recruiters. Instead, they’ve built deep relationships with over 85 nearshore delivery partners packed with talent. And they manage their engagements actively instead of just plugging bodies in and running away. That simple difference—working with partner companies, not freelancers—leads to a whole raft of advantages.
BetterUp isn’t just a coaching app, it’s a Human Transformation Platform™
BetterUp is a brilliant, creative, ambitious company with a whole new way of helping companies create high-performance cultures. If buyers just think of it as an app or a health benefits provider, they miss the point. The point is the model: a combination of assessment, coaching, content, services and consulting that all works together to create value.
How to market your unique model
In our work with B2B model-innovators, we’ve learned stuff. Hope these help:
Name your model
Before you can explain your unique model, you need buyers to know that you have one. Using generic language does not make that any easier. So name the model, then define it. If a name already exists for your model, use that name but tell people how it’s optimised for them—Paddle didn’t invent the Merchant of Record model, but they were the first to bring it to the SaaS payments world. They chose to keep that name—Merchant of Record—and explain why it’s such a cool thing for SaaS payments.
Explain how your model is different
Remember: if buyers get your model, they get how you’re different. So make it as simple as possible to understand. Dedicate a page on your website to defining and explaining the model and its advantages.
Play with metaphors
Even new models are rarely completely new. They’re often ported over from some other category. Metaphors can help buyers get there faster. So you might be “The Netflix of Skin Disease Content” (hope not). Or “The iPhone of Zimmer Frames” (I’m in). Make sure the metaphor works though. Nobody wants “The Uber of Potatoes”.
Connect your new model directly to buyer benefits
Different is cool. But better is better. Make it super-clear how your model does things for buyers that no one else can do. For Paddle, it’s, “We’re already set up in Latvia so you can start selling there in minutes.” (As you build bridges between aspects of your new model and the things buyers want, the killer word to use is “so”).
Keep explaining and evangelising the model
Do it in content, ebooks, videos, white papers, blog posts, emails, TikTok dances… Do it till you’re blue in the face, then do it more. Give talks on it. Do webinars. Crash panels at conferences. Teach executives to talk the talk. Cram the “Our Model” story down the throats of the sales team.
Pick off key stakeholders and explain the model to them
Your model might bring the Blockers out of the woodwork. Target them specifically and address their concerns. Like Paddle does in this Merchant of Record: A Guide for CFOs.
Answer all their questions before they ask them
New models will always trigger lots of questions. You know exactly what these questions are, so answer them in advance. By all means, bust out the FAQs, but you also need to get your answers in people’s faces throughout the buying journey. And drive people to your question-preempting content.
Use customer stories early and often
Few buyers want to be the lab rat for some founder’s business school dissertation. Even the earliest of adopters will want to see you’ve done this before—for companies a lot like theirs—and it worked. If it really is your first rodeo, you’d better have really shiny boots and a big-ass hat. If it isn’t, squeeze your current customers till they sing their ROI song.
Play to your strengths, people!
Sometimes we meet companies with unique business models who are kind of hiding from it. They fear that it’s too much to explain. Too ‘in the weeds’. Or that no one will care.
That’s a shame, because a new business model can be just as powerful as a patented technology advantage—maybe more so. The key is to dig down to the WHY, then trace all the ways that the new model leads to new value for buyers.
Name the new approach. Define what makes it different. Explain why that’s better for customers. Prove it with case stories and data and stuff.
When you do, you’ll be playing your best card instead of bluffing.