I got an interesting question the other day in regard to a software product that wasn’t selling well. On paper, it was ahead of the curve, addressed some clearly critical problems, and was well funded. So how do you fix the “it isn’t selling” part?
Years ago, I was actually given an award for coming up with a process to answer this kind of question. I’ll cover that, but I’d first like to talk a bit about why this problem recurs and how to address sales and marketing.
One of the reasons this problem recurs is because it isn’t addressed upfront. Ideally, when a product is first conceived, the first thing you do is create its go-to-market plan. That way, the product can be designed to sell well through whatever channels have been delineated for it. But most firms create the product and then build the go-to-market plan, which means it is generally too late to alter the product to fit the firm’s existing sales and marketing skills.
My worst experience was when, as a marketing manager, I was told by a product planner that I needed to create a marketing plan for his product.
I asked who the customer for the product was. This is the first step in building a go-to-market plan -- you identify and profile the ideal customer, figure out the best way to make that person want the product, then determine the most efficient method for closing the sale. His answer was, and I kid you not, “I don’t know his name.”
I explained that I needed a profile, to which he replied, “If you need that to do your job, you’d better get it done.” I refused his product. He went to another marketing manager (big company) who did a $20K study and found there was not a customer in the world who would buy this product (something I thought was kind of obvious). The product had cost $20M to develop (and this was the early ‘90s). Had the firm done that $20K study at the start, it would have saved $20M.
This is why you do the go-to-market before you develop the product.
Market and Business Analysis
A surprising number of people I meet with present me with products that they represent as unique, but it’s rarely the case. Part of building a go-to-market plan is looking at what other products in the class are doing to generate demand and how they’re fulfilling it. You can then identify best-in-class practices and emulate them.
If there are other products in the class and they aren’t selling well either, that means no one has yet made a market for the class. This means that if you want to sell the product in volume, alone, or as part of a partnership, you have to find a path to creating a market. This is an expensive undertaking because you have to make potential customers aware of the problem and of relatively unique solutions to it.
You can see this with smart watches at the moment; FitBit created the market for exercise-focused offerings, but no one has made the market for general-purpose smart watches and that class isn’t selling well. Apple, which typically makes the market for a class, hasn’t even been able to do it and, as a result, all products are under-performing.
Sales and Marketing
Marketing creates demand, sales fulfills it. If you have defined the customer and there is a market, then marketing puts together a campaign that largely highlights the problem to be solved and makes it current (so it is a priority). If this is done right, it creates demand.
There are basically two types of salespeople: farmers and prospectors. Farmers are those who, for the most part, service existing accounts and sell upgrades and renewals. They are typically high salary and low commission. They focus on keeping the customer happy, knowing what the company’s pain points are and who the decision makers are.
Prospectors are a very different breed and their role is critical to a new product. They have low salaries and high commissions. Successful prospectors often become the most highly paid people in the company. Highly risk-tolerant and status-motivated, this is the group you send in to initially carve out a new market. However, they have to follow three rules to be successful.
Three Rules of Prospecting a New Product
First, the product not only has to be sold, it has to be deployed.
Second, the account has to be capable of being referenced. This means prospectors can’t screw the account or bribe the buyer, and the account has to become a viable advocate. Prospectors can initially give the product away (though that’ll clearly have an adverse impact on their commission), but when building a market, you need references more than sales at first.
Third, prospectors need to focus on the client brand; a reference no one has heard of isn’t very valuable. A brand that everyone knows is incredibly powerful, particularly if it is known to be a very successful company.
Initially, you need a team that can create the impression that this is a hot product that knowledgeable people are buying in mass.
You need to develop a go-to-market plan before you start developing your product (including budget, if the market doesn’t yet exist). Otherwise, you run the risk of either not having the right product or not having enough budget to sell it successfully. You need to capture and use best practices if the market exists, or find a way to create them if it doesn’t, through individual or partnered efforts. Finally, you need to execute on both demand generation and fulfillment with resources optimized to do both.
A lot of products fail largely because these simple rules aren’t followed.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+