How to see the wood for the trees: How characterising your client base can help define your go-to-market strategy
You have a great product. Technically, the performance is better than expected. You know you can manufacture it at acceptable cost. You have settled on your target market. So far so good.
So, who’s your customer? Being able to answer that question may be the difference between success, and the whole house of cards falling down.
Ultimately, to have a viable business, you need to be able to provide a product or service to a customer who derives value from that product or service such that you can sell it for more than it costs you to provide it. It is important therefore to understand the customer, and the value they will perceive in what you are offering. Further, you need to understand who the customer is (who is paying, i.e. a hospital) as opposed to the consumer or user (who may not be paying but will be benefiting, i.e. a surgeon).
Whether you have a medical device that could go into hospitals or be sold through insurance companies, a new healthy beverage that could go direct to consumer or be sold in offices, or a new coating product that you are convinced has an opportunity somewhere within the automotive supply chain, understanding and being able to articulate who your customer is, is vital.
There are many factors to consider when identifying customers, however here’s three key areas to think about…
Understand the Ecosystem
For any product or industry, it is important to understand the ecosystem or supply chain and define where within it you can play. For example, getting a new smart packaging product to market involves many different suppliers, each of whom may be a potential customer for your new technology. Depending on the benefits and value you are promising, you may need to target anywhere from the NFC antenna manufacturer to the filler or the brand owner.
Define the Benefits
For each of your potential customers within an ecosystem, the benefits and the perceived value they derive from their interaction with you may well be different. Is it the speed of production for the NFC chip manufacturer, or the fact the technology also has aesthetic qualities that appeal to the brand owner that might be more compelling? Are you actually a threat elsewhere in the chain?
Ultimately, you want to identify those for whom your key benefits are most compelling
Test, Test, Test
You now have hypotheses along the lines of
“I believe that within market X, customer segment Y is the most interesting because they will perceive the value of benefits A, B and C”
Time to get out there and test!
How can you get your products to market more efficiently? You have great ideas, a great team, investors onside. All is well, but somehow the final piece of the puzzle doesn’t quite fall into place. Issues with the technology, commercial strategy or overall product concept keep you from getting to market. How can you overcome these hurdles? Whilst traditionally the answer would be to keep working on a solution within your own four walls, your chances of success increase dramatically if you explore options from beyond your own organisation. From start-ups and SMEs to large multinationals, “open innovation”, or the adoption of knowledge, solutions and capabilities beyond traditional organizational boundaries, has been used to successfully bring products to market more efficiently time and again. So, if you’re not already using it, why should you consider using open innovation to support product development programs within your organisation?
1. There is no need to reinvent the wheel
It is surprising how often problems in one industry have already been explored and solved in another. Organisations seeking to keep manufacturing facilities clean have learnt from anti-fouling coatings on ships, food manufacture from control of emulsions in the personal care industry, and agricultural land surveying from military drone technology. There may also be situations where one industry is trying to remove a particular issue, which actually represents a potential solution to the challenge you are facing. Further, by combining multiple external technologies, something even more powerful might be realised, providing a better solution than any approach on its own. It is certainly worth exploring whether someone else already has an answer waiting for you, or if something can be combined with your existing approaches.
2. You get a fresh perspective on the problem
You are living and breathing your technology and your product concepts. No one knows it like you do, right? That also means that no one else has the baggage like you do. Seeking external support to better define the problem, challenge your conventional wisdom and provide stimulus for problem solving may be what you need to take your product to the next level.
3. You get access to additional technical or commercial expertise
With the best will in the World, you cannot have a monopoly on relevant expertise for your area of interest. In this age of spin-outs, start-ups and regular restructurings, this is even more true now than ever before. There are likely people beyond your organisation who can help to accelerate you to success. Why not tap into that expertise as well as that available to you internally?
4. Opening up even greater opportunities
You may be happy with the performance of your product in its home market. But what if it could be launched into a whole new market or geography. Imagine the possibilities! By partnering with organisations or experts already playing in those areas, you may have a quick route to capitalising on these opportunities through expansion of product portfolios, access to their technology, use of new brands or even price points.
5. Your current and potential users can help to define and refine your offering
There is lot to be said for checking what customers want before you go too far! By engaging with external users and stakeholders, it is possible to obtain feedback on existing products or technologies to identify frustrations and unmet needs. This may yield new product concepts or even whole new markets and opportunities for you and your company.
©Fresh Perspectiv 2017