You have a customer that loves what your company does for them. The account team has creatively solved a challenge, aligned with their Key Decision Makers, and is helping them meet their objectives year over year. You are delivering value and the account is highly profitable. The customer loves you and loves your solution.
You say to yourself:
“Self, I Think We Can Take This Solution to Market and Sell More Accounts Just Like This One”
So, you create a catchy name for the solution, build a web page, fire up the marketing process, develop a bunch of sales materials, and start having conversations with similar companies…
You get meetings with executives in these accounts. You may even get to proposal stage with a few. But nobody buys your solution…
A Single Customer Doesn’t Necessarily Represent the Needs of the Market
Companies often have unique programs or applications that were developed for a single account, which they try to replicate across other similar customers. These attempts regularly fail because they haven’t done the research and market validation needed to ensure they understand the problem, solution requirements, value, and buying process across a broader set of customers. A product development process helps to minimize the risk of failure, by methodically gathering customer input and market insight, then testing your assumptions with potential buyers before making significant investments.
When managed correctly, a product development process will also ensure that you maximize the revenue & profit opportunity. By identifying critical features, planning for needed investments, and validating the message with customers prior to launch, organizational readiness can lead to highly successful growth initiatives.
When companies skip these validation steps, the results can be financially damaging, and worse, disheartening for the organization. At a minimum, companies seeking to launch a new product into the market should focus on these areas:
Four Keys to Success
Interview Key Decision Makers in Your Existing Account. This will give you the perspective you need to approach similar buyers. Be sure to ask: How do they perceive the value you are creating for them? How would they describe what you do? What is the most critical aspect of your solution? Do they think there are other competitors who could provide the same solution? Be sure to clearly define the compelling event(s) that caused them to buy. Was there a change in the customer’s business strategy? Did the regulatory environment change? Was there a financial event? Did a market trend suddenly shift? Also – be sure to understand how your solution fits in the overall picture of the account. Are there other processes that happen upstream and downstream from your solution? What conditions need to be in place for your solution to work? Are there other companies involved in the overall value chain?
Conduct Market Research. This step will give you the context of the industry for which you are trying to launch the solution, providing insight into the number of potential customers and competitors. What macro trends are impacting the industry? Who are the major thought leaders or influencers in the market? What competitors are already providing solutions? How many customers are likely to be experiencing the same Compelling Event?
Formulate a Solution Hypothesis. A solid solution hypothesis will cover both product and market assumptions, along with financial expectations:
Product Assumptions include problem and solution definitions, key metrics for success, and your unique value proposition.
Market Assumptions should focus on identifying key market segments, likely competitors, your advantages, and the sales process.
Financial Expectations will estimate revenue/profit streams, along with capital & expense requirements.
Test Your Hypothesis. You’ve done all this work and have terrific insight, so how could you not be successful? Because you haven’t tested your hypothesis with real buyers. It is very important that you have a series of “non-selling” conversations with companies that represent the target market. This is a critical “moment of truth.” Yes, it can be disheartening if potential customers tell you “that’s a stupid idea.” But it’s much better to learn this before you whip your sales team into a frenzy about a new solution. There’s nothing worse than having your sales team be the ones to discover that the solution isn’t viable.
Product development success requires discipline, just like any other aspect of running a business. When you follow a structured development process, you build confidence across the organization, minimize financial risk, and increase the likelihood of a successful launch.
For more information about product development and marketing, visit http://www.butlerstreetllc.com/marketing-resources