Top 10 Reasons Go-To-Market Strategies Fail and How To Avoid Them
By Chris Harvey - Director and Co-Founder of Octant Strategic. He has created and launched new products and services across numerous sectors including food, aviation and aerospace, construction L&D and business services. His credits include National Business Awards for marketing strategy and innovation and several 'best new' awards.
As a strategic advisor, I have spent more than 30 years devising successful go-to-market strategies for business, both for products and service offerings and have come across a variety of problems that organisations face in getting a new product or initiative successfully off the ground. These problems vary in terms of size and impact, but as a general rule, there are 10 most commonly found.
1. Too little time and / or, too much haste and not enough speed
2. Lack of proper market analysis
3. Lack of qualitative research and genuine customer insight into wants and needs
4. Poor positioning with no meaningful differentiation strategy
5. No real value proposition
6. Unrealistic volume forecasts and / or over-optimistic pricing
7. Lack of a creative or focussed selling idea
8. Lack of engagement and initial support and training of sales people
9. No plan to test market or trial via a soft launch.
10. Insufficient time and investment to give it a chance.
Most of these are pretty obvious but there is an interesting link between the points where the first issue creates the second as a consequence, and that causes the next issue and so on.
For example, without enough time, research can suffer and with it customer insight. That can lead to a weak strategy and value proposition and that reduces appeal and take-up, so volume targets are missed and that affects costs and margins.
My top ten tips for success are below .. But first the stats.
Some estimates put new product failure rates as high as 80%, but most industry studies suggest that this is unfair across all sectors and a more likely rate estimate is between 35% and 50%. That's still a big concern.
The 80% failure rate usually includes FMCG brands that often fail because of consumer inertia or multiple retailer distribution or rate-of-sale problems, where neither are achieved sufficiently, or quickly enough, to earn support or avoid delisting.
A failure perhaps, but in a sense it’s more about not succeeding fast enough.
But, forget failure, here are my top tips for success.
Make a realistic time plan, but factor in that it could take longer. If speed to market is the imperative, which it often is, spend the time in the beginning on research and customer insight. The amount of time needed depends on a whole host of issues but a year is the average time required to properly research, develop the plan and the go-to-market strategy. This excludes actual product development and market testing.
Assumptions are the mother of all **** up's. It is vital that you work on real data not just on opinion, even though you may know that category well. This is relatively straightforward in B2C markets, though it can be expensive, but in B2B the data is not always available.
Thorough desk research is needed and industry associations can be helpful. In my experience a great way to canvass industry opinion is at exhibitions and events and this is best done by independent, third party marketers, as they can get information that insiders cannot. It is sometimes the seemingly naive question that produces the most revealing answers.
The best opportunities, strategies, and communication ideas are usually based on customer insights.
In B2C, it is all about sufficiently robust qualitative research, ideally supported by quantitative work and carried out by specialist researchers. In B2B, these broad principles still apply, but research is usually based on depth interviews with your own customers and other industry influencers with whom you may have a working relationship, or at least know.
Remember that 'customer insight' is far more than customer research. It is the ability to explore avenues and interpret findings with a fresh perspective that counts. So again, using an independent third party can be very useful because your customers won’t necessarily tell you what they really think of your performance or the market or opportunities.
I have conducted numerous customer research projects and gained insights that would never have emerged from a customer / supplier conversation.
Notwithstanding that, customers can also be over optimistic on the appeal of an idea and unduly negative on price expectations. So skill, judgement and a dash of cynicism is always required in interpreting results.
The term ‘positioning’ is widely used and can mean different things to different people. These range from a basic description of the brand, e.g. "we are positioned as a youthful brand”, to a statement of the offer, e.g. “we are positioned as a high performance product", to an indication of where the product sits in the market relative to others, often based on price, e.g. "we are positioned as a 'premium' product".
These all have some merits but the key role of a positioning statement is to be as specific and focused as possible. First, it must define exactly whom you are talking to and what part of the market you compete in. This is The Frame of Reference and it needs to be as narrow as possible. Thereafter, it must state your Point of Difference in that defined space. This Point of Difference must be part of the principal benefit the consumer derives from the product, The Key Customer Benefit.
Clearly, this requires a real understanding of the customer and the competitive environment and a forensic analysis of the data, reinforcing the importance of research and customer insight.
Another widely used and abused term. Essentially the value proposition is more than just the benefit the product brings, though that is a very important component. The value proposition should really define WHY the customer chooses your brand above the others in terms of the 'value' it represents.
That value is often ultimately pecuniary, e.g. brand X costs a bit more but lasts longer, but equally, the value can be part of an emotional benefit such as security, trust or status.
It can be this value that justifies a premium.
The value proposition for Ryan Air is ‘low cost’. The value proposition for Easy Jet might also be ‘low cost’ but with the added value of the feeling that it also ‘respects you as a business traveller’.
L'Oreal's value proposition ‘Because you are worth it’ is a classic. It's about confidence, assertiveness, self-worth and empowering women to be themselves. In B2B, another classic is IBM and the status and security it stood for, summed up in the apocryphal saying "nobody ever got fired for buying IBM".
Predicting volume is never easy, especially for a new product or service and it's why test marketing or low-risk, soft launches should be considered. Volume estimating is essentially about assessing the overall market potential based on numbers of potential customers, levels of interest from research, the scale, appeal and price of competitive offers, likely market penetration, purchase frequency and levels of repeats. All of which will vary enormously product-by-product and market-by-market.
Price research is useful but results of 'propensity to purchase' and ‘price expectations’ are almost always overstated. This is why many volume estimates are over optimistic, as are estimates of the time it takes to get the volume. So, err on the side of caution.
It is said that people prefer brands with a story and this is generally true. The key objective is to create a story that is rooted in the product or its origin and be able to encapsulate the essence of this story in a selling idea. A good test of this is if you can start a presentation of the new product with '' this is about XXXXXXX.''
Some examples from my repertoire are: The Merchant Gourmet food brand. This is about ‘the man that travelled the world in search of fine foods’.
Or, for Speedy Hire's on-site construction safety training programmes, it was about 'Safety from The Ground Up'.
Or for Capita's Constructionline. This is about 'the value of accreditation'.
These selling ideas are powerful because they can become the focus for marketing and critically, the focus for selling. Salesman love a story and are generally adept at telling them. This leads me neatly to the next issue.
A self-evident truth you may think, but it often suffers from ‘too little, too late and too complicated’ syndrome.
Sales people generally love a new anything because it gives them a new reason to talk to customers, but it also adds to their workload and can get in the way of their 'day job' as some see it. It requires them to absorb new information and a new pitch, which requires effort and confidence. Launch events can be expensive but workshops don't have to be and can work well, particularly if they have a fun, social element, ideally linked with a relevant brand story theme.
In my experience, engaging with sales people early is desirable. That way they have the time to become familiar with the new product and can get used to the new pitch. Giving them an outline presentation is important but allowing them to adapt it (up to a point), is beneficial. The trick is to allow enough time to absorb the information without missing out on the momentum that product launches and initial sales force enthusiasm generates.
Sales people also love giving things away to customers, so trial offers, branded ‘widgets’, folders, mementoes etc. are all useful ways to get the message across and build the story.
Test markets reduce risk and can identify teething problems and unforeseen issues but they are also in the public domain so can pre warn competitors, so caution here. An alternative approach is a soft launch where the product or service is introduced with low-key marketing support to reduce financial risk but at sufficient weight to create some awareness and customer engagement. This approach is best done in association with selected customers who are happy to support the trial approach.
It is natural that after all the effort and investment in getting a new product or service off the ground, company principals are always impatient to see financial results. It is common for these to take longer than anticipated. It is equally common that a new product does well in the early days because of the launch effort and initial enthusiasm but then settles back to a more regular running rate. A follow up 're-launch' is often the best action regardless, but it is best to be patient and give the product the chance to establish itself.
The acid test, depending on the nature of the concept, is usually repeat purchase, signs of positive word of mouth referral and positive customer feedback. If these indicators are encouraging, clearly stay with it. If there are problems and they are not fixable, you may need to think again.
At Octant Strategic, we provide robust go-to-market strategies that help businesses successfully launch their new product/service initiatives. Contact us on 03300 884 388 to see how we can help your business.
Posted by: Chris Harvey - Director And Co-founder