Launching new products that succeed and generate lots of sales begins with a winning product strategy. We are seeing good early success now with our latest product, WinningWare QuickLaunch™, so I thought I’d share how we arrived at our product strategy, as a case study example.
Before diving into our strategy, let’s talk briefly about what is meant by “strategy” vs. “tactics’.
One way to think about “strategy” is it’s the hammer used to drive a tactical advantage you possess into a marketplace, a concept I probably first learned from the timeless book from 1990 named “Bottom Up Marketing”, by Jack Trout and Al Ries (two of my favorite marketing authors).
Proper strategies reinforce and “amplify” your tactical ability to execute.
Properly devised, a good strategy supports the tactics, driving them deeper into the marketplace. The strategy hammer hits those tactical nails so hard, they just get driven into the market much easier and faster than they would otherwise.
Bad strategies often seem good on the surface, until you try to put them into action, and have to search for a way to implement them. Excellent strategies take proven tactical advantages and make them more powerful.
So for example, let’s say you have an established network of local contacts and relationships in a particular industry – this is a tactical advantage for selling and networking locally. So you decide you want to take full advantage of these contacts and leverage these relationships to block competitors from entering the market against you locally with a particular new product you’re introducing.
So you use your superior contacts and relationships to erect barriers to entry into the local market by blocking others from gaining access to the best local distribution available. So your strategy is to invite the business owners on an all-paid hunting/fishing trip for a long weekend, where everyone meets each other and you capitalize on your contacts and deepen the relationship with everyone.
During that trip, you have several group “strategy” discussions, where you talk about the advantages of everyone working together in the local market – along with how much money you’re all going to be able to make promoting this new product. None of your competitors have this kind of relationship with the key decision-makers at these companies, so you have secured your position in this market and improved your ability to execute in a sustainable way.
Another strategy would be to advertise locally on Google, driving traffic and business through to these preferred local dealers, making it easier for them to succeed selling your products.
Neither of these strategies would work well without these dealer’s ability to execute locally or your ability to deepen and maintain these relationships.
So, onward to our new product strategy case study example. The following diagram is from an internal PowerPoint presentation we used to organize our product strategy, review it internally and then settle on the initial product direction.
As shown in the above diagram, our product strategy consists of six areas of strategic advantage. Let’s have a look at each component of this product strategy.
1. Enable Non-Consumption - the first strategy pillar involves enabling those who aren’t doing proper launches today with the ability to launch their products and websites. Enabling non-consumers to become customers typically involves bridging one or more “gaps” that are preventing consumption, including:
- Wealth - the ability to afford or pay for the current alternative by offering a pricing advantage is a common way to attract non-consumers. In our case, existing alternatives cost $2,000 and up (for launch training or consulting fees), so we chose a less expensive online subscription business model, which costs a customer less to get started and enables them to pay over time (in effect it’s a consumption-based payment plan – lower get-in cost, only continue paying if you’re actually using the service on an ongoing basis)
- Skills - the ability to understand and/or execute often prevents many people from getting a particular job done, so finding creative ways to simplify or automate certain tasks enables new buyers to enter a market. Instead of “training” people how to become “launch experts”, we decided to simplify things by using software to automate the process of defining the launch, then create landing pages, sales page templates, email launch sequences, etc., along with a step-by-step guide which makes it easy enough for anyone to perform a launch
- Time - reducing the amount of time required to get the job done or making it extremely “convenient” is another way to attract new buyers. In our case, automating launch planning and content creation saves most people several weeks of time, making it possible for entrepreneurs and small businesses to do their launches properly and even launch sequentially to multiple market segments effectively
- Access - making a solution more readily accessible to buyers is another strategy to attract new buyers; for example, eliminating the need to travel to take a training course and instead making everything available online.
2. Nail the Job to be Done - in order to attract buyers, the product absolutely must get the job done the buyer wants to accomplish. Nailing the job begins with a clear understanding of the buyer’s existing alternatives. For each alternative, we need to understand the intended “outcomes” that occur as a result of taking this approach, and importantly, the “unintended consequences” of taking this approach.
I like to create a list of the alternatives, then create two columns – intended outcomes/results, unintended consequences. Most products solve the problem users want to address, but may be accompanied by negative by-products; i.e., there are things that can and do go wrong. Understanding these two dimensions is very powerful.
Next, it’s important to focus on what customers want, like and dislike. Making sure you address customer preferences better than the competitors makes your product look more like the obvious best choice.
In our case, we realized that planning, organizing and executing a product launch usually impacts a small business or entrepreneur at a critical point in time, and is painful and time-consuming enough to cause them to often take shortcuts, which reduces sales and profits.
If you do everything required to plan and execute a proper launch, it also typically interferes with other critical path tasks (negative consequences), such as:
- One’s ability to complete the product properly by attracting early adopter customers to test the product and then fixing the product based upon this feedback to obtain quality customer testimonials
- The time required to attract and nail down quality joint venture partnerships, affiliates and resellers to support the launch
- Developing the website, e-commerce systems and other selling infrastructure that must be developed, tested and optimized
So automating the launch process means the business owner and marketer have the time to take a well-balanced approach to the launch, minimizing the negative consequences and increasing sales and profits at the same time.
3. Delight, but don’t Overshoot – it’s important to delight customers with a few “wow” features (sometimes called “Purple Cows“) and a solid product; however, it’s even more important not to over-engineer a product, which costs more money and time and then makes consumption more difficult on a broad scale. In our case, we were tempted to add some more advanced features, but resisted this temptation and instead worked closely with actual customers to give them what they ACTUALLY WANTED instead of what we THOUGHT they would want.
And this is another important point. It’s better to work with a few key, actual buyers who represent your target market and develop one key item that THEY WANT vs. five items YOU THINK buyers will want. Customers typically have ten times the clarity about what’s actually needed than we do as product managers and marketers, so find some representative customers and delight them – and you will also be delighting a big portion of your future market in the process.
4. Master an Emergent Strategy – anytime you are entering a market with something new, there are risks and unknowns that cannot be foreseen or planned for in advance. An “emergent strategy” is one in which your strategy and possibly certain key tactics can only be discovered once you are immersed into the marketplace, where the learning process can begin.
As learning occurs, you will discover marketplace realities that cause your best strategies to “emerge” or become visible and more obvious. This emergent strategy process is very commonplace in high-tech fields and when introducing a completely new product concept that hasn’t existed before.
The keys to an “emergent strategy” are:
- Begin with a set of reasonable assumptions
- Create a “learning plan” (the assumptions you know you need to test, de-risk and validate and learn from)
- Invest a little to learn a lot (for us, build a prototype, show it to customers and learn from actual customer use and give customers what they want and need most)
- Be patient for revenues, impatient for profits – for us, this meant “soft-launching” to our in-house list before going to large JV partners (making sure we had everything in place, keeping costs low initially, then launching bigger once we knew we were truly ready)
- Rapid iteration and learning at minimal cost – when entering a market with a new product, it’s important to iteratively learn – adjust – learn – adjust and keep the costs and cycle time to a minimum. For example, we began with a 30-day free trial offer, then learned for various reasons that a 30-day money-back guarantee was a better approach in our case
- Add resources once profitability and growth are clearly sighted – just good business practice.
5. Pricing/Segments – the days of attacking a broad, horizontal marketplace are gone for all but the largest corporations. Entrepreneurs and small-to-medium businesses must choose which segments or niches of a market to target and how best to price the product to compete effectively.
In addition to pricing, prioritizing and tailoring messaging for each niche is also required for best results. In our case, we deliberately chose not to serve larger enterprises, as our product is probably not robust enough to meet the highly-customized demand of enterprises, and our online routes-to-market aren’t well-suited to selling to enterprises (who typically expect a direct sale approach).
6. Place/Promotion - choosing the places where you will intersect with buyers is another critical aspect of your go-to-market strategy for the product. How best to position and promote the product is equally important to ensure your advertising, landing pages and sales copy resonates with your target buyers. In our case, we chose an indirect route to market using affiliates and JV partners who already have a presence in our target market segments, as well as our own online direct routes (PPC, SEO, social networking, etc.)
I hope sharing our product strategy with you as an example is helpful and gives you a fresh perspective that helps you develop and deliver more valuable products for your customers.
So I have shared our product strategy and some key concepts here. What about you? We would love to hear about the strategies you are finding work for you in your marketplace.