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New products and product innovation are the best ways to promote revenue and growth. More than 25% of total profits coming from the launch of new products. However, some 95 percent of new products fail!
Why? It’s simple--companies get so engrossed in designing and manufacturing new products that they leave little time (or budget) for marketing them.In other words, they lack an effective Go-to-Market strategy—they make products for which there are no buyers.
Products developed in isolation from their potential buyers often crash and burn when they come in contact with real world. A Go-to-Market strategy prevents this collapse by shifting the focus from the product to the customers.
Your GTM plan is part of your marketing strategy. It specifies how you will create and deliver value to your target customers. It answers questions like
The Go-to-Market strategy intersects with many other processes, including product development, positioning, segmentation and targeting, channel marketing, 4Ps, budgeting, and value creation/delivery.
If you are planning to launch a new product and want to maximize the chances of success, here are 9 steps to put you on the right track.
The fundamental reason for product failure is that marketers fail to fully comprehend their customers and their needs.
The conventional way is to segment your market based on the demographic, psychographic, geographic, and behavioral attributes of your customers.
The conventional segmentation and targeting approach goes something like this:You find the common attributes of people who would be buying your products or services. For example, if you’re running a downtown coffee shop, your core target market might consist of young professionals in their 20s or 30s.
However, there’s a flaw with this approach.
People don’t buy products because they’re 20 to 35 years old or because they work in an office downtown. Rather, they have specific “jobs” that need doing and they “hire”a product or service to dothe job for them.
So, as the coffee shop owner, you’d know that your customers might be looking to take a break from the office routine. Or they might be looking for a place where they can meet with clients. These are the jobs they need to get done.
Can your coffee shop do those jobs for them?
Your approach to product development should focus on providing solutions allowing your customers to complete their “jobs”.
In an anecdote told by Harvard Business School professor Clayton Christensen, there once was a milkshake shop that wanted to increase its sales by introducing the perfect milkshake.
Using questionnaires, they asked their customers to describe the perfect shake. Based on this feedback, they introduced new shakes that most of their customers should have liked—from the survey data.
But these new shakes didn’t have much impact on the sales—they didn’t get the “job” done.
Example: Creating the Perfect Milkshake
Perplexed, the owners hired an agency to assist them with product development. After observing customer behavior at the store for a few days, the agency concluded that most of the customers bought their shakes in the morning--after missing breakfasts.
They had a long commute ahead of them. They bought milkshakes because they wanted something healthy that would keep them filled until coffee break...and because sipping milkshake with the straw made the commute less boring. That’s the “job” that needed to be done.
Based on these findings, the owners introduced thicker shakes with chunks of fruit in them. Not only were they more filling, but also took more time to sip and lasted longer while driving. Not surprisingly, the sales went up dramatically.
In this case, the agency discovered the “job” customers wanted done, and then optimized the product to do that job in the best possible way. When you can do a job better, you have more chances of getting hired to do it.
While you must apply the usual segmentation attributes, go beyond them and discover the real problems that your customers need your product to solve. You must go deeper into customer behavior in order to create a deep product that satisfies customer needs at all levels.
The great marketing guru Philip Kotler believes a product is a more than a tangible thing. When seen from the customer’s angle, a product is a combination of tangible and abstract value. There are five levels on which customers attribute value to any product.
To be successful, you must understand these levels and develop a deep product that delivers value on all the levels.
Core Product: This is the basic level of the product, which fulfills a primary need. For example, if you’re making sandwiches, the sandwich is your core product.
Generic Product: These are the features or attributes of the product. A sandwich can have different ingredients, sizes, shapes, and types.
Expected Product: These are the benefits customers expect when they use the product. A sandwich is expected to be filling, tasty, and healthy.
Augmented Product: This is about the added benefits which make the product unique. The Augmented Product includes the branding, services, environment, and other benefits that exceed the Expected Product.
Potential Product: This is what the product may become in the future. A sandwich can be served with coke and fries and called a combo. Or there can be new flavors, sizes, and a healthier variant.
Keep these levels in mind when you’re going through the product development process, coming up next.
Think about how your customers see your product. Design your product in a way that it satisfies customer needs on all the five levels. Remember that no amount of marketing budget can make a product successful unless it delivers distinct and unique value on all the levels.
Do you see anything wrong with this picture?
Looking at this 8-step sequence, it’s easy to see why most companies become overly involved with the process. They get separated from market realities.
Developing a product without assessing your market’s needs is like putting the cart before the horse. However, if you don’t have a complete product, you can’t really find out if your customers would love it. It’s almost a chicken-and-egg situation.
So what do you do?
The answer may lie in Eric Ries’ Lean Startup methodology. It’s a scientific approach to new product development that eliminates uncertainty through customer research and iterative product development, thus minimizing the risk of failure.
If you cut through the jargon, following this method means starting with your customers. Its practitioners make every effort to determine customers’ needs first. Observation, interviews, questionnaires, surveys, segmentation data, marketing data and deep analytical thinking are your main tools in this game.
Here are the three steps of the lean startup approach:
It would be a mistake to consider the product development process as simplistic or linear. It’s a complex and chaotic process in which the product is always evolving based on the market feedback and environment.
According to Philip Kotler, brand positioning is an act of designing the company’s offering and image to occupy a distinct place in the minds of the target customers.
Source: The Health Compass
Simply put, positioning is how your customers perceive your product compared to other, similar products.
Source: The Health Compass
Marketers build these perceptions in the minds of their customers by creating a product that provides the perceived benefits and then communicating those benefits through consistent messaging.
To be effective, brand positioning must be:
So, how do you achieve powerful positioning for your brand?
Positioning extends beyond your product slogan. In fact, the slogan will be the last thing to decide in your positioning process.
Here are a few tips to help you reach powerful brand positioning.
Positioning is how your customers perceive your product. You can come up with a clear, unique, meaningful and deliverable positioning by building and highlighting different attributes into your product. It is necessary to test and validate your positioning statement before you use it as the basis of your communication and product enhancement.
Technically speaking, a marketing channel consists of the people, activities and structures that are used to deliver messages, products and services to the end consumer.
But in digital marketing, a channel can also be used to deliver just the messaging and bring the customer to the point of sale through a sales funnel.
Customers today use hundreds of channels. They consume more than 12 hours of media per day and shift seamlessly from one channel to another.
A person may start the day by scanning their Facebook newsfeed, clicking on an ad and go to a website, switching to Google to find product reviews, or making a phone call to the company. Customers may even read a physical newspaper.
That’s why a successful brand must be present on multiple channels. Here’s how you can select the most suitable channels for marketing your new product.
Use your customer and competitor research data to select multiple channels for distributing your products and messaging. Use them to send marketing messages and offers about your new product. For the best results, you should integrate multiple channels and offer a cohesive, consistent, and seamless brand experience across all of them.
Next to poor customer analysis, inadequate budgeting is the second most common reason for new product failure.
Budgeting may be easy if it’s a brand extension you’re doing—you’ll have the historical data to use as the starting point. But if it’s your first product, you might have to rely on calculated guesses and zero based budgeting.
Source: Demand Metric
Remember: even the brightest product can fail if you don’t provide enough funding for its marketing. Therefore, you need to gauge your budgetary requirements carefully and arrange for the funds in time.
Take the time to prepare the new product budget and make it as accurate as possible. Have extra resources at hand just in case the new product launch doesn’t go as planned.
As you may have noticed, your Go-to-Marketing strategy involves efforts and inputs from multiple departments. The idea generation and screening work may take place in R&D, the budgeting is the domain of Finance, product development may be carried out by Manufacturing, and customer research by Marketing.
A successful product launch is managed like a project—it IS a project. Select team members from different work areas, organize them into goal-driven teams, define work streams, and assign responsibility for different tasks. Appoint team leaders or work stream owners who will be responsible for achieving the work stream goals.
These work streams allows you to harness resources from across departmental boundaries. It does not let your new product launch get affected by organizational silos. It enables you to look beyond the day to day priorities and focus on the long term goals of product development, launch and post-launch phases.
Thinking in terms of project management and work streams enables you to embrace innovation and new product launch as top priorities. It gels together the bits and pieces of your Go-to-Market strategy and makes the products launch smooth, seamless, and successful.
In fact, this should be the first step. I have placed it toward the end because I wanted you to get familiar with the whole process, so you may include all of the activities in your product launch plan.
So, now that you know the nuts and bolts of your Go-to-Marketing strategy, you should arrange everything into a neat and tidy plan, with all activities plotted on a timeline.
Here’s a product launch plan template from Product Plan. You can customize it to suit your needs. Go ahead, try it. It’s free.
Demand Metric also offers a Product Launch Plan Template that you can download and customize. These are simple and inexpensive tools that any small business will find helpful.
Assemble your Go-to-Market strategy into a document containing all activities, plans, and goals—everything. This will be your guidebook for the new product launch. Include all relevant information including research data, competitive analysis, pricing recommendations, media selection, and other data pertaining to the new product development.
Prepare a separate marketing plan for the launch and post-launch phases. You have already selected the channels. Now you need to pick the channels that will be the most cost-effective during the critical launch phase.
You should plan a launch event and build your launch plan around it. The event will be your main channel. Select a few other channels such as email, blog, live video, and social media as supporting channels.
You might be inspired by some of these 20 inexpensive ways to promote your product launch.
If you are a tech startup, consider submitting your company and product to top startup directories.
You can also consider using crowd-funding platforms such as KickStarter in your Go-to-Market strategy.
Over-communicate with your team during the launch phase to minimize the chances of last minute errors. Keep an eye on your timelines and performance milestones.
Do not lose momentum after launch. Keep targeting your audience on your selected channels. Only after your message has passed through several touch points and interactions that your customers will finally start buying your new product.
New product launches are critical. A last-minute glitch can ruin your Go-to-Market plan. So, if something can go wrong, expect that it will go wrong—plan accordingly. Make sure you select the most promising channels and monitor the launch closely.
Technology plays a crucial role in new product development and launch. Whether it’s a technology product or a consumer product that you’re developing, you should select the right technology stack to develop and execute your Go-to-Market strategy.
But, what is the right Go-to-Market technology stack?
There’s no standard set of tools for planning and managing product launches. You’ll need to mix and match different software depending upon your requirements. Here are a few tips to help you select your tools.
Preparing and executing a Go-to-Market strategy is a tedious and complicated process, which can be best managed only with the help of project management and research tools. Use the appropriate technology stack to make the product launch smooth and your life easy.
So, there are the 9 steps to building a Go-to-Market strategy.
One final word--these steps are not meant to be taken in a rigidly chronological sequence. Developing and launching a new product is a complicated and non-linear process. Taking the time to complete these 9 steps can avert serious losses and complications down the road.
Regardless of your exact sequence, you should bear your customers in mind first. They are the people who will hire you to do the jobs they need doing. Your Go-to-Market strategy will make sure you keep them in mind from idea to launch—and beyond.
Would you agree? Let us know in your comments and share this post with your team.
The art is building the right growth campaign. The science is in the results.