Your product plan
Entrepreneurial marketing means that you develop your offers collaboratively with your customers. Rapid prototyping is fast, agile and lets you try things out and amend them quickly to create something that will work for a customer.
However well you plan, the market won't want the offer that you come up with. If you are lucky it will want about half of it mixed up with a lot of other things that you only find out by interacting with customers. Once you get something that several people have bought you are in business. Sales you have made is the best form of market research. Once you have something that sells consistently you can develop a process to turn it into a product.
This is now a casual process. Here are some ideas about how you can put some system into this informal approach. It works both for start ups and for creating new products in an existing firm.
Informal product research - a systematic approach
As the Owner Manager you’re ideally placed to carry out informal qualitative work. Don’t delegate this – you need to feel what’s going on. But it will be easy. If YOU ring up one of your established customers, tell them that you’re interested in what else you could develop to help them more and that you’d like to come in and see them – they are almost certain to say yes.
But you need to be prepared. You want to hold a structured conversation. So create a questionnaire – I’m not talking about multiple choice tick box stuff here – what I want you to do is brainstorm with your chief collaborators some open ended questions which will tell you what things the customer isn’t getting that they want and what new trends they see emerging that they will have to deal with.
Then just go and have a conversation with them – buy them lunch and ask them if they don’t mind if you tape the conversation. Tell them you’ll get your PA just to type up the transcript for your own use. These days you can record this on smart phones and tablets – if you have a good reason which you have they’ll agree. I know – I do it all the time.
You need to spread your net wide rather than deep so I suggest you talk to 2 long established customers, 2 of your biggest customers, 2 new customers, 2 of your most adventurous customers and 2 current prospects. Aim to talk with them for about an hour. You might also talk to a couple of industry or business experts who you have reason to believe are reliable to get another perspective.
They’ll be happy to talk to you and you should then have a really clear idea of what’s current.
Catching the next wave
You need a stream of new products that attract new customers and reinforce existing ones if your business is to grow.
You can't stay with the same product line because with time the market becomes more commoditised, margins go down and you slide over the back of the wave. This universal truth is illustrated here. It represents the product life cycle as seen by Geoffrey Moore. The comments about the Gorilla and his gang refer to the need to build a value network of collaborators if you are to become the dominant player in the market. At a certain point in the market's development some of these collaborators can be phased out. If your strategy is to BE a collaborator you need to be aware of this.
The other interesting point about his is the profit line. Profit is high in the beginning but as the market becomes more commoditised you need to be able to retain your margins. This will mean re-inventing the offer as a stop-gap but ultimately you will need to find a new wave to surf. We are particularly practiced at dealing with this type of transition.
Paradoxically if you do survive everything the market can throw at you and you become the last man standing, then your prices can go up again.
You always need to be looking for the next wave - to replace your current offer - or, if you want to grow, to constantly add new products to you portfolio. It's much easier to sell new products to your existing customers rather than try and take your brain-children into new markets where no-one knows you. But three times as many UK companies try and do it the hard way. We can help you to be in the smart party.
So finally - What makes a good product?
- People want to buy it.
- They tell each other about it
- You can get your money back quickly.
Surprising more people don't follow this advice.
Contact - To discuss how we can help with developing products ring 0845 094 0407