With the new year upon us, it seems worth reflecting on product launches I’ve experienced or observed in the past 20+ years.
Some have gone well, while others were – well, let’s just say – more like a ‘trickle’ than a launch! Reasons are many, but a few common themes seem to emerge. The first few are covered in this post, with remaining topics to follow.
1. Power washing with a sprinkler
2. Real dollars follow real problems
3. Hope is not a strategy
4. Confusing the chicken with the egg
5. Putting lipstick on a pig
6. Ready – Fire – Aim
7. If you don’t know where you’re going, you’ll probably get there
1. POWER WASHING WITH A SPRINKLER
Most of us can relate to doing necessary chores, like getting two weeks of road slime off of your car after commuting during rain or snow for the last two weeks. How many of you do it by getting the garden hose, setting the sprayer to ‘sprinkle’, and wait for all the grime to auto-magically fall off? Heck no, most of us will drop some quarters into the machine to use a sprayer that focuses all that water on a specific area, with enough penetration power to get the job done efficiently, even though it means washing a small section at a time. (Forget for a moment the obvious option to just drive through the car wash – that’s called outsourcing. :-)
Effective marketing is really not much different. You need to identify & prioritize the specific segments and buyers/users within those segments, and focus your marketing efforts with powerful messages that tell them how your product can help them solve ‘real’ problems’. Now it gets interesting…. what is a powerful message?
That’s a large topic by itself, but let’s use a real-life example witnessed earlier in my career, and only slightly embellished to avoid boring you. (The names have been changed to protect the innocent.)
Jim: Hey Jean (Jim’s boss), I’ve nailed the positioning for our product launch. I’ve done my research, and according to the extensive statistical analysis and calculations in my 30 megabyte excel file, I’ve concluded without a doubt that what matters most to our target customers is to save TIME and MONEY. Would you like to give me a raise now, or wait until after what will soon be the most successful launch in the history of software?
Jean: That’s great, but I don’t think we should just use ‘throw away’ phrases like that.
Jim: What do you mean throw away phrases? I know for a fact that these are the most pressing problems our customers have!
Jean: I’m sure you’re right, but do me a favor and go find out how many of our competitors also promise to save time and money. If it’s less than 100%, I’ll buy you lunch, if not, you’re buying. Should I tell you what I want to order for lunch now, or wait to find out what you learn?
Jim: OK, point made. But what do you suggest?
Jean: Make it real for them. Identify problems you know they have that just drive them crazy, and provide a short, impactful message that tells them HOW you’ll help them save time & money, so they don’t have to figure it out on their own. And for heaven’s sake, focus on things that we do better than our competitors; better yet, pick things that they can’t do at all if you can.
Jim: Oh, OK…got it! (Jim was a very quick learner.)
The takeaway here is to ask yourself whether you’re just using ‘throw away’ phrases in your key messaging, or if you’re truly resonating with your target market in a way that emotionally motivates them because you can solve a problem that already drives them crazy, and do so in a way that is uniquely differentiated from your competitors.
2. REAL DOLLARS FOLLOW REAL PROBLEMS
You’ve probably heard, “if you want to be successful, spend less time communicating features, and focus more on telling customers how you’ll solve their problems.” While this is absolutely true, how many times have you asked yourself how real and pervasive the problems are that you’re solving, and what defines ‘real’? (Hint: You’ll know when they either pay you to solve it, or stop paying you if you don’t.)
This of course leads to the next obvious question of how you’ll know whether customers will pay you to solve the problem. The short answer here is that it’s a combination of art and science, but a systematic internal process for developing market knowledge that enables you to create a strategic and quantifiably justified roadmap is important, and probably a deeper topic for another article!)
3. HOPE IS NOT A STRATEGY
This is my favorite to talk about, because it happens so frequently, even in established, experienced companies.
Does the following scenario sound familiar?
Roger (Product Manager) to Frank (COO): Frank, I’m ready to share my business case for that new product we’ve been talking about building. This opportunity is HUGE.
Frank: I look forward to reviewing it in detail, but what’s the bottom line?
Roger: My research shows that the market for this product includes at least 200,000 potential buyers in the U.S. alone, and if we expand internationally, it could be nearly three times that! Better yet, we’ll be on the cutting edge of this because only one or two of our competitors can even come close to what this product will do. We need to start building it NOW to get a first mover advantage.
Frank: Sounds like a good start…how much do you think we can sell, and what’s it going to cost me?
Roger: All we have to do is sell to 1% of the market every year, and at $5000 a pop, that alone will be $10 Million! I talked to sales, and they said they could sell a ton of it! I can get it built for $1 million, and for another $500,000, we can do a great marketing launch campaign.
Frank: Hmm…so we can invest $1.5 million, and sell $10 million each year? That’s an ROI of nearly 7x. Wow! Now let’s talk about exactly how we’re going to achieve that 1% of the market. Before I became COO, I spent a lot of time in marketing & sales.
Roger (getting nervous): OK
Frank: First, let’s talk about how the businesses in your target segment will actually find out about this, and what steps they’ll go through before they give us their hard-earned money. I know you don’t have all the answers right now, but let’s just make some best guesses and fill in the blanks later. With your $500,000 in marketing spend, how many potential buyers do you think will at least hear about your new product in the first year?
Roger: I’m shooting for 20%, which is about 40,000 buyers.
Frank: OK, and of those, how many will take time to learn more to see if they might be interested in it?
Roger: Hmm, good question. This product is fantastic; I’d say at least 25%!
Frank: Well, you may be a little optimistic, but let’s assume you’re right. So, that means 10,000 buyers will learn about the product. What’s the next step in the process for them?
Roger: It’s business software, so most of them will need to sign-up for a free trial before they’ll buy it.
Frank: OK, so of the 10,000, how many will take the time to sign-up for a free trial?
Roger: Good question, but I think at least 20% would sign-up
Frank: So, once they sign up, how many will follow-through to actually use the product before their free trial expires?
Roger: I don’t know for sure, but let’s say 75%.
Frank: I think you might be a little optimistic again Roger, let’s say 50% - the world of sales is littered with prospects with good intentions. That leaves us with 1,500 potential buyers. How many of those do you think will buy it?
Roger: I’d say at least half will buy it within 60 days; this product is amazing.
Frank: I hope you’re right about that. My experience with other products has been more like 20%, but let’s assume you’re right. If the list price is $5,000, what do you think the average discount will be?
Roger: We’ll need to run some promotions to get the ball moving, but we’ll keep the discount to no more than 20%.
Frank: So, let me do some quick math….we’ll sell them at about $4,000 each to half of the free trials, so that means 750 buyers at $4,000 each, for a total of $3 million. What do you think our profit margin will be?
Roger: If it’s like our other products, we should get to 20% after a few years, but in the beginning, it will be more like 5% to 10%.
Frank: I think you’re optimistic again Roger, new products sometimes take a long time to become profitable, but assuming profit is 10%, that means I’d have to spend $1.5 million to get $300,000 per year, and it would be five years before I’d break-even. There will also be on-going investment needed of least 20%, which is $200,000/year. That leaves me with $100,000 profit per year, and a break-even of 15 years, and that’s only if we’re profitable from the start, and if your assumptions are not too optimistic. I love your enthusiasm Roger, but I think you need to think through this a little more and come up with a better plan, sorry. Let’s talk about a smarter , 'leaner' way to go about this…
In reality, your COO probably wouldn’t have this much patience, but it illustrates why it’s so important to make sure you don’t confuse hope with an actual strategy that includes a realistic view of how you’ll get prospects through the entire marketing and sales funnel, and turn them into buyers.
4. CONFUSING THE CHICKEN WITH THE EGG
When you woke up this morning, I’ll bet you didn’t know that Benjamin Franklin is the father of successful market launch planning. Well, neither did I, because he isn’t - but what is true is that his quote, “Failure to plan is planning to fail” couldn’t be more true than it is when it comes to product launches.
In fact, I could make an argument that planning at least the core elements, such as the market segmentation, value proposition, key messaging, and high level sales strategy should be done while defining the product you want to create. After all, if you don’t know who you want to sell it to and why they would care enough about it to give you their money and time, why would you build it? And don’t forget, you also need to make sure you have selected a price they’ll be willing to pay that adds enough to your company’s bottom line to make sense. Assuming you’ve got this nailed, it won’t do much good if you haven’t got a marketing, sales & distribution strategy that can successfully communicate your message to the market.
Quite often, particularly in technology-driven companies, many of these things are more of an afterthought than being central to the product definition process. That’s not to say that companies can’t be successful by taking this approach – but the risk of failure is much, much, much higher! (Did I say much higher already?)
There may have been a time when this kind of business risk taking was more common, but in retrospect, it was mostly when there was a strange economic bubble motivating irrational business behavior. (For those of you old enough to remember, you may recall the ‘Dot.Com’ bubble, when venture capital money was being thrown at entrepreneurs creating almost any kind of business as long as it was on-line, regardless of whether anybody bothered to ask the market if it solved a problem they cared about.)
5. PUTTING LIPSTICK ON A PIG
Have you ever had that nagging feeling that the product launch you’re working on actually seems to be more about your company wanting to make a splash than something your target market will actually care about? We all know that successful marketing does often require one to create a buzz about things that the market isn’t exactly clamoring for, of course, but when is time to question whether you’re just trying to push a bowling ball up the hill?
If you want a quick read on whether what you have to offer is ‘launch worthy’, try this…invite one of your best sales representatives for a cup of coffee, and tell them you’d like their help to figure out how to explain the value of what you’re planning to launch. Explain the value proposition and positioning to them in your own words, and ask them if they can help you think of a way to pitch it so well that they believe it themselves, and their prospects will pay for it. Better yet, talk to one of your customers or a prospective customer that your sales team is currently engaged with.
If you strike out, you either have to dig a little deeper in your creative well to tweak the positioning, or you don’t really have something that’s launch worthy. Maybe what you’re ‘launching’ is really more like a maintenance update that customers expected anyway. It’s still important to communicate it effectively, but don’t make the mistake of pretending it’s worthy of a full market launch, so you can save your valuable marketing & sales resources for something that is.
6. READY - FIRE- AIM
OK, now that you’ve got the right product being created for the right market segment, with a value proposition & go-to-market strategy that makes sense, let’s talk about execution.
This is a topic worthy of a far deeper dive than I’ll cover here, but my primary message is that cross-functional leadership, communication and collaboration needs to start at the beginning of your product planning process. Here are a few key elements:
Cross-functional team: As product manager, it’s your job to define and lead a team comprised of managers that represent functions relevant to the launch, each of whom have been given authority to represent, and make decisions on behalf of their department. Each company and launch is unique, but examples of functions typically required include product development & QA (including risk & security specialists if applicable), marketing, sales, implementation/professional services, customer service, and technical support. Other functions will also need to be represented at least on an ad hoc basis if needed, such as finance, legal, IT, HR, etc.
Development, Launch and Support Plan: The title of this article implies a singular focus on the product launch, but in reality, you need to consider the entire process leading up to and following launch, and consider your customers’ entire experience of evaluating, buying, implementing and getting support for the product.
Decisions made during the planning process will directly affect the success of all these parts of the customer’s journey. During your kick-off meeting with your cross-functional team, make sure that the first thing you accomplish is to communicate the overall goals and objectives for the launch, and make sure that each member is ‘on-board’ with the effort. This doesn’t simply mean showing up to the meeting and answering questions when asked, your success will ultimately depend on each team member taking an active role in defining the key milestones and deliverables that are needed to achieve the objectives of the launch, and to take responsibility for their function to deliver against those commitments.
In short – you need to define an overall project plan that will achieve the objectives, which includes at least high level milestones with specific deliverable dates, and each team member is responsible to make sure their portion is delivered. If you’re fortunate enough to have an actual project manager to fill in the supporting detail, that’s ideal. However, in most cases, you won’t, so each functional leader needs to create their own more detailed project plan that enables them to meet the milestone deliverables in the plan you’ve created.
Team Collaboration: Once you’ve got the plan established, the on-going meeting agenda then consists primarily of each team member sharing their function’s status vs. the plan you all agreed to. It’s important for the entire team to be part of these discussions, even if there is no change from their area, so that they know what’s happening across the functions and can address questions & concerns real-time, before they become a bigger problem down the road.
A good product manager will be adept at running these meetings, with the goal of facilitating direct communication between stakeholders, and making sure decisions are made, actions defined, and owners delegated. If this approach is new for your company, you may find that at first, team members will assume that the product manager owns most of the deliverables – don’t get trapped by it! Though you certainly do need to take your fair share of the action items, you need to help the team understand that your role is not to be the ‘hub of the wheel through whom all spokes connect’. A more effective way to think of it is more like a circle where every person is directly connected to the other, and the product manager is sitting in the middle to make sure those direct connections occur.
Training: The product manager will ultimately be the market & customer expert for their product line, and will quickly become the default ‘go-to-person’ for any question that arises during the go-to-market process. The problem is that you will simply not have enough time to be all things to all people, and more importantly, spending too much of your time doing tactical support will prevent you from more strategically planning and running the business. As part of the overall plan, make sure you’ve identified stakeholders in your company who will need to be trained, so that they can become the expert for their area. Think more about ‘training-the-trainers’ than being the only source of knowledge in the company. It will be more realistic for you, and better for the company, I promise.
Internal & External Launch: This is another example of something that is relatively easy to do, with huge impact, but often not done due to lack planning, shortage of time, or both. The basic idea is to establish two very important milestones in your overall plan: Internal Launch, and External Launch.
The purpose of the internal launch is to simulate the actual external launch by replicating the entire customer experience but do so only internally, including the up-front marketing & sales process, through completing the order, implementing the solution, and following up with customer support. In reality, there will be some elements that you can’t replicate until you actually go live, but with a little creativity and some internally password protected web pages, you’d be surprised how much you can accomplish.
Following the internal launch, get the team together and have each functional manager report back how things went, and whether there were critical failures or successes, and fix critical items before launch.
Another huge benefit of this process is to motivate all stakeholders to fully complete their deliverables. Do not proceed with the internal launch until they are ready, and do not be swayed by excuses, such as “the product is still a little buggy, and we haven’t had time to test the installer yet, but don’t worry, it will be fine when we launch.” Or better yet, “we don’t yet have all the product skus set-up in the system yet, and the ordering page is still under construction, but don’t worry, we’ll manually fake it for the internal launch and it will work for real when we launch.”
With the internal launch under your belt, and time spent to correct problems found, I guarantee that your external launch will be most successful where it counts most – when your company’s hard-earned cash is being spent to launch it, and customers get their irreversible ‘first impression’ of your product.
These are only part of successful go-to-market planning, but what I’ve shared here represent some of the biggest elements.
7. IF YOU DON'T KNOW WHERE YOU'RE GOING, YOU'LL PROBABLY GET THERE
One of the best leaders of a customer service organization I’ve known was especially good at getting large numbers of people in his organization to choose from literally thousands of competing priorities to focus on the things that would most effectively move the business forward. On a daily basis, his entire team was faced with an onslaught of incoming requests and critical issues to resolve for customers, not to mention internal stakeholders with a myriad of needs. One of his favorite sayings was, ‘they’ll focus on what you measure’.
By establishing very clear objectives, supported by measurable target outcomes, such as ‘1-hour response rate of at least 90%’, or an ‘issue backlog of less than 50’, and transparently sharing all results with his team and the company, he successfully transformed his team from a somewhat unorganized, moderately successful group to being rewarded for exceptional performance.
The same is true for successful product launches. During the planning process, don’t forget to establish key metrics and what your month by month goals are for them. It doesn’t need to be an exhaustive list, just a few very meaningful goals that are easy to understand, memorable, and transparently communicated within your company during the launch process. What they are will vary depending on the objectives of your launch. Of course, revenue and volume are obvious choices, but you may also want to consider metrics associated with certain critical behaviors amongst your team, such as ‘free trial activation rate’, ‘net promoter score’, ‘issue resolution rate’, or others.
Congratulations…you’ve read this entire article! I know we’ve just scratched the surface, and I’d love to hear from you regarding other experiences.
If you’d like more information, feel free to contact me via e-mail or phone. Another great resource on the topic of market launch planning is Pragmatic Marketing. Both their classes and follow-up resources are highly regarded in the Product Management community (www.pragmaticmarketing.com).
John Hanson is President of MarketView Consulting, LLC, which helps companies monetize more value with a repeatable product management process for discovering & delivering what the market wants and will pay for. For more information, please contact John via e-mail (firstname.lastname@example.org), or by calling 651-261-0344.