My product management toolkit (39): go-to-market checklist

 

Thinking about how to best launch a product or feature to market can easily become an afterthought. I’ve certainly made the mistake of being so immersed in the execution of an idea that I forgot to think about how to best take a product to market. It doesn’t matter whether your product or feature is consumer facing or aimed at internal customers, I recommend considering the following as part of your go-to-market checklist:

Pre-Launch

  • Positioning statement – Write a positioning statement which explains succinctly who the product is for, what the product does and why it’s different from other products out there.
  • Internal announcement – Do an internal announcement of some sorts – e.g. at a staff meeting or via email – to let people know that a new product or feature is coming. This helps to build momentum and excitement as well as get valuable internal feedback in the run-up to launch.
  • Success criteria – Agree on the measures of success for your product, both quantitative and qualitative. What does ‘good’ look like post-launch and why? What kind of customer feedback are you hoping to receive once your product is live, which metrics are you expecting to be impacted positively? How do you manage ‘bad’ customer feedback? Upfront alignment on success or failure will also mean that you’ll be able to iterate quickly on your product or messaging if things aren’t heading in the right direction.
  • Training and demos – When launching a new product or feature, it’s important that people across the business have seen the product in action and have been trained on how to use it. Think for example about the people in customer support who might get inundated with customer questions once the product has been launched.
  • Launch date – Set a date and time for the launch and communicate to both people within and outside of your company. Your colleagues and a select group of customers can both provide you with valuable feedback prior to launch and spread the word. Also, make sure that your launch date doesn’t coincide with national holidays, other planned launches – by your company or a competitor – etc. as you don’t want the announcement of your new product to snow under.
  • Promotional content and FAQs – This covers all content and materials that will help explain the product, its benefits, who / what it’s for, and help (target) customers of the product. Drafting FAQs and sharing them internally and a select group of potential customers first, is a great way to make sure you’ve pre-empted any questions or concerns your target audience might have.
  • Media planning – As Pawel Lubiarz explains, launching a product without a media plan in place is a considerable risk. You’re only going to launch your product once, so you need to make the most of that occasion. Which digital and print media would you like to help message the launch of your product? Which journalists are likely to report on your product?
  • Press release – Draft a press release that captures the key aspects and benefits of your product and share with journalists and media outlets that you’ve identified (see my previous point).
  • Test. Test. Test – I know it sounds obvious but even if you think have tested your new product or feature, please make sure you test again in the run-up to a big launch. get people who aren’t as close to your product as you and your team to use the product, and look out for any glitches and gotchas.
  • Social media strategy – Create the launch announcement and content to be posted on relevant social channels, and think about appropriate content formats and frequency for the different channels that are relevant to your brand. The content you share on TikTok is likely to differ widely to what you put out via TechCrunch, for example.

Post-Launch

  • Launch evaluation – How did your product launch go? What did we learn? How we can iterate on our product and marketing our product, based on the initial numbers and customer feedback.
  • Reach out to customers – Customer learning doesn’t stop once the product or feature has been launched. Reach out to customers who have bought or used the product, people that left feedback or raised support questions. Consider creating new content to share now that the product is out in the market.

Main learning point: I’m sure that there’s a lot more items that could be added to my go-to-market checklist so please feel free to leave a comment or reach out with any suggestions of things to include!

Related links for further learning:

  1. https://www.aha.io/roadmapping/guide/release-management/what-is-a-good-product-launch-checklist
  2. https://tinuiti.com/blog/ecommerce/product-launch/
  3. https://blog.hubspot.com/marketing/product-launch-checklist
  4. https://moz.com/blog/product-launch-checklist
  5. https://backlinko.com/product-launch-checklist

 

 

My product management toolkit (29): analysing competitors

Don’t believe anyone who claims that they don’t look at what their competition is doing. Agreed, there’s a fine line between doing a healthy amount of competitor analysis and being completely obsessed by what the competition is doing but I believe it’s important to understand how your product differentiates from similar products.

Competition is good. Product isn’t a zero sum game and it’s important to understand the competitive landscape that you operate in and to figure out your product ‘niche’. I try to do a competitor analysis of some form or other on an ongoing basis, as your competitive landscape is bound to evolve.

Before delving into ways of analysing competitors, let’s first look at the ‘what’ and ‘why’ of competitor analysis:

  • Understand where your product fits – Reviewing competitors helps to understand where your product sits within the market, analysing and comparing on aspects such as features, price, perceived benefits, etc.
  • No need to look at ALL competitors – Realistically speaking, it’s impossible to keep up with all of your – direct and indirect – competitors, all the time. When you narrow things down, you’re likely to find that a small percentage of companies in the market either scoop up most revenue or are direct competition in your specific market segment.
  • Treat competitor analysis for what it is; valuable guidance – Instead of getting obsessed with your competitor(s), get obsessed with your customer! I can only refer to a quote from the wise Sun Tzu in “The Art of War”: “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” I find it very helpful to understand the competitive landscape and the position of my product or service in it, without becoming completely distracted by the features a competitive product does or doesn’t offer. You don’t want your competitors to dictate which features (not) to include, and cause ‘featuritis’ as a result!
  • Find the perfect niche for your product – The likelihood is that your product will be targeting the same customers that other companies and their products are already serving. Your product needs to be exceptional and differentiated enough for customers to consider switching. Look at the market and ask yourself: “are we solving the same problem, but differently?” or “are we tackling a different customer problem altogether?”

Now, let’s look at some common tools you can use to analyse your competition:

 

SWOT analysis

Fig. 1 – SWOT analysis – Taken from: https://research-methodology.net/theory/strategy/swot-analysis/

The SWOT analysis is probably one of the more traditional ways of studying and comparing competitors. It might be an older method, but SWOT still holds true and is a tried and tested way of understanding your competitors:

  • Strengths – Specific characteristics and attributes which give a company competitive advantage. For example, one could argue that design, brand, a loyal customer base and innovation are key strengths of Apple.
  • Weaknesses – Specific characteristics and attributes which reduce the competitive strength of a business. For example, major debts and inadequate online presence hinder lots of today’s retailers to compete effectively with Amazon.
  • Opportunities – Advantageous situations or circumstances that can create new competitive power for businesses. Think, for example, of entering new geographic markets, new customer segments or new product opportunities.
  • Threat – Disadvantageous situations or circumstances which can hamper companies in their ability to compete. For instance, I expect ‘Brexit’ to hinder UK companies in attracting talented new recruits or operate globally.

 

Kano analysis

Fig. 2 – Kano analysis – Taken from: https://en.wikipedia.org/wiki/Kano_model

I’ve written previously about conducting a Kano analysis as I find this method very helpful when looking at the competition from a customer point of view. Understanding what the “basic needs” and “delighters” are in your market, will help  understand:

  • The position of your product – Understanding where a product sits vis a vis customer expectations.
  • Which battles (not) to pick – Where do you want to play and what will you playing for? Are you happy to just focus on so-called ‘hygiene’ factors or do you want to focus on more unchartered territory?
  • Potential product opportunities – Where are the opportunities for improved or totally new products, and why?

 

Lean Canvas

Fig. 3 – Ash Maurya’s “Lean Canvas” – Taken from: https://blog.leanstack.com/business-models-vs-business-plans-4a802e15c51d

Plenty of companies use Ash Maurya’s “Lean Canvas” to better understand your product and market, which is great. In addition, you can also use the Lean Canvas framework to compare and contrast competitors. For example, what’s the dominant channel of companies X and Y, and how does their path to customers compare to yours?

 

Direct customer feedback

My favourite way of analysing competitors is to hear directly from customers. For example, when I worked at a digital music service, I ran sessions simply observing people using the likes of Spotify, Rdio (which died a few years ago) and Soundcloud. This way, my colleagues and I could learn first hand about how people felt about our product in comparison to the competition.

With digital products and services, it’s harder to do a traditional “bind product test” but you can still observe and listen to people testing different products which are all trying to solve a similar problem. People will tell you why they think product A is better than product B, especially when you make it clear that you don’t have an allegiance with any of the tested products!

Fig. 4 – Blind product testing – Taken from: http://www.bloncampus.com/columns/fundamental/why-blind-testing-is-important-in-product-research/article7976927.ece

 

5 Forces of Competition

Fig. 5 – Michael Porter’s “Five Forces of Competition” – Taken from: https://www.pocketbook.co.uk/blog/2017/02/14/michael-porter-competitive-strategy/

I can imagine that you might have come across Porter’s “5 Forces” before. Like the SWOT analysis, the 5 Forces approach is a longstanding one which helps companies understand their sources of competitive rivalry and which factors they need to concentrate on in order to gain the upper hand.

Main learning point: Don’t shut your eyes and avert looking at the competition! Equally, don’t get freaked out by competitive products or services. Instead, analyse the competition to get a better feel for whether and how your product differentiates. You can then use these insights to focus more on delivering customer value and creating strong points of differentiation.

 

Related links:

  1. http://edwardlowe.org/how-to-conduct-and-prepare-a-competitive-analysis/
  2. https://www.quora.com/How-do-Product-managers-perform-competitive-analysis-for-enterprise-products
  3. https://medium.com/pminsider/real-competitive-analysis-is-about-learning-to-love-your-competitor-15e45b9ef10a
  4. https://marcabraham.com/2015/09/13/what-is-psychographic-segmentation/
  5. https://marcabraham.com/2016/06/17/my-product-management-toolkit-11-assessing-the-market/
  6. https://news.greylock.com/the-only-metric-that-matters-now-with-fancy-slides-232474cf414c
  7. https://blog.leanstack.com/business-models-vs-business-plans-4a802e15c51d
  8. https://www.pocketbook.co.uk/blog/2017/02/14/michael-porter-competitive-strategy/

My product management toolkit (28): testing price sensitivity

Normally when I talk to other product managers about product pricing, I get slightly frightened looks in return. “Does that mean I need to set the price!?” or “am I now responsible for the commercial side of things too!?” are just some of the questions I’ve had thrown at me in the past.

“No” is the answer. I strongly believe that as product managers we run the risk of being all things to all people — see my previous post about “Product Janitors” — and I therefore believe that product people shouldn’t set prices. However, I do believe it’s critical for product people to think about pricing right from the beginning:

  • Do people want the product?
  • Why do they want it?
  • How much are they willing pay for it?

Answers to these questions will not only affect what product is built and how it’s built, but also how it will be launched and positioned within the market. I’ve made the mistake before of not getting involved in pricing at all or too late. As a result, I felt that I was playing catchup to fully understand the product’s value proposition and customers’ appetite for it.

Fortunately, there are two tools I’ve come across which I’ve found very helpful in terms of my comprehending the value a product is looking to achieve — both from a business and customer perspective: the Van Westendorp Pricing Sensitivity Meter and the Conjoint Analysis respectively.

The Van Westendorp Pricing Sensitivity Meter has helped me to learn about the kinds of pricing-relating customers to ask (target) customers:

  • At what price would you consider the product to be so expensive that you would not consider buying it? (Too expensive)
  • At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good? (Too cheap)
  • At what price would you consider the product starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it? (Expensive/High Side)
  • At what price would you consider the product to be a bargain — a great buy for the money? (Cheap/Good Value)

The aforementioned Van Westendorp questions are a good example of a so-called “direct pricing technique”, where the pricing research is underpinned by the assumption that people have a basic understanding of what a product is worth. In essence, this line of questioning comes down to asking “how much would you pay for this (product or service)?” Whilst this isn’t necessarily the best question to ask in a customer interview, it’s a nice and direct way to learn about how customers feel about pricing.

Example customer responses to the Van Westdorp questions — Taken from: http://www.5circles.com/van-westendorp-pricing-the-price-sensitivity-meter/

The insights from applying these direct questions will help in better understanding price points. The Van Westendorp method identifies four different price definitions:

Point of marginal cheapness (‘PMC’) — At the point of marginal cheapness, more sales volume would be lost than gained due to customers perceiving the product as a bargain and doubting its quality.

Point of marginal expensiveness (‘PME’) — This is a price point above which the product is deemed too expensive for the perceived value customers get from it.

Optimum price point (‘OPP’) — The price point at which the number of potential customers who view the product as either too expensive or too cheap is at a minimum. At this point, the number of persons who would possibly consider purchasing the product is at a maximum.

Indifference price point (‘IPP’) —Point at which the same percentage of customers feel that the product is getting too expensive as those who feel it is at a bargain price. This is the point at which most customers are indifferent to the price of a product.

Range of acceptable pricing (‘RAI’) — This range sits between the aforementioned points of marginal cheapness and marginal expensiveness. In other words, consumers are considered likely to pay a price within this range.

Van Westendorp price sensitivity meter (example) — Taken from: https://www.qualtrics.com/uk/market-research/pricing-research/

 

In addition to the Van Westendorp Price Sensitivity Meter, I’ve also used Conjoint Analysis to understand more about pricing. Unlike the Van Westendorp approach, the conjoint analysis is an indirect pricing technique which means that price is combined with other attributes such as size or brand. Consumers’ price sensitivity is then derived from the results of the analysis.

Sample conjoint analysis question — Taken from: https://www.questionpro.com/survey-templates/conjoint-analysis-retirement-housing/
Sample conjoint analysis question — Taken from: https://www.questionpro.com/survey-templates/conjoint-analysis-retirement-housing/

 

When designing a conjoint analysis study, the first step is take a product and break it down into its individual parts. For example, we could take a car and create combinations of its different parts to learn about combinations that customers prefer. For example:

Which of these cars would you prefer?

Option: 1

Brand: Volvo

Seats: 5

Price: £65,000

Option: 2

Brand: SsangYyong

Seats: 5

Price: £20,000

Option: 3

Brand: Toyota

Seats: 7

Price: £45,000

This is an overly simplified and totally fictitious example, but hopefully gives you a better idea of how a conjoint analysis takes into account multiple factors and will give you insight into how much consumers are willing to pay for a certain combination of features.

Main learning point: I personally don’t expect product managers to set prices for their products or design price research. However, I do think we as product managers benefits from a better understanding of the pricing model for our products and a better understanding of what constitutes ‘value for money’ for our customers. The Van Westendorp Price Sensitivity Meter and the Conjoint Analysis are just two ways of testing price sensitivity, but are in my view to good places to get started if you wish to get a better handle on pricing.

Related links for further learning:

  1. Van Westendorp pricing (the Price Sensitivity Meter) – 5 Circles Research
  2. Conjoint analysis – Wikipedia
  3. Why You Should (Almost) Never Use the van Westendorp Pricing Model
  4. Van Westendorp’s Price Sensitivity Meter – Wikipedia
  5. Pricing research: A new take on the Van Westendorp model | Articles | Quirks.com
  6. Easy Guide: How To Run a Van Westendorp Pricing Analysis – Dimitry Apollonsky
  7. Van Westendorp Price Sensitivity Meter
  8. Conjoint Analysis – introduction and principles

 

Lessons learned from Uri Levine, Co-Founder of Waze

Last Friday, I attended a talk by Uri Levine, Co-Founder of Waze, a community-based traffic and navigation app that was sold to Google for $1.1 billion. In a two-hour session, Uri shared some of his key learnings from the Waze startup journey; from starting from scratch to a successful exit. I felt that his talk was packed with valuable insights, and I’ve selected some key ones to share:

Focus on the problem – I loved how Uri concentrated on the problem that you’re looking to solve. He talked about problem solving being a key driver for him and the different startups that he’s (been) involved in. For example, Waze originated from Uri’s frustration with traffic jams … Uri then talked us through the “Adjusted Startup Curve” to illustrate the typical journey of a startup, starting with a problem to solve (see Fig. 1).

Fig. 1 – Knife Capital’s “Adjusted Startup Curve” – Taken from: http://ventureburn.com/2013/07/the-startup-curve-south-africa-wiggles-of-realism/

Don’t be afraid to fail – I always find it incredibly refreshing when other people speak openly about failures and not being afraid to fail. As Uri rightly pointed out, the fear to fail (and therefore not trying) is a failure in itself (see Fig. 2). He was also keen to stress that creating and managing a startup is never a linear, upward journey. By contrast, you effectively go from failure to failure, but you might win in the end – if you’re lucky that is (see Fig. 3).

Fig. 2 – Michael Jordan quote about failure – Taken from: http://www.quotezine.com/michael-jordan-quotes/

Fig. 3 – “Journey of Failures” by Douglas Karr – Taken from: https://twitter.com/douglaskarr/status/333027896241299457/photo/1

Passion for change – Uri’s points about entrepreneurs and their passion for change really resonated with me. I’m not an entrepreneur, but I feel that I’ve got some innate restlessness which is usually fed by change, learning and trying new things. It was interesting hearing Uri talk about how this passion usually doesn’t sit with well with fear of failure or loss. “Move fast and break things” was one of Uri’s mantras in this regard.

Honest validation of your ideas – As an entrepreneur, Uri explained, you need to fall in love with your idea. However, he also highlighted the importance of being able to critically assess your own idea. He suggested asking yourself “who will be out of business if I succeed?” If you don’t know the answer to this question, Uri explained, your idea probably isn’t big enough.

Iterate based on user feedback – Uri reminded me of the mighty David Cancel as David is also very focused on solving customer problems and listening to customer feedback (see Fig. 4). Like David, Uri didn’t get overly zealous about Agile or lean development methods. Instead, Uri talked about constantly iterating a product or service based on customer feedback.

Fig. 4 – David Cancel at Mind the Product conference, London 2016 – Taken from: http://www.mindtheproduct.com/2016/12/importance-listening-customers-david-cancel/

Main learning point: I found Uri Levine’s talk hugely inspiring; he was honest about the challenges involved in creating or working at a startup whilst at the same encouraging us to solve problems and try things.

Related links for further learning:

  1. http://www.tellseries.com/events/uri-levine/
  2. http://uk.businessinsider.com/how-waze-co-founder-spends-his-money-2015-8
  3. https://www.ft.com/content/49857280-8eaf-11e5-8be4-3506bf20cc2b
  4. https://www.crunchbase.com/person/uri-levine#/entity
  5. https://www.theguardian.com/media-network/2015/may/28/waze-uri-levine-tips-startup-google

My product management toolkit (17): Assess market viability

Whether you’re a product manager or are in a commercial or strategic role, I’m sure you’ll have to assess market viability at some point in your career. For that reason, I wrote previously about assessing markets, suggesting tools that you can use to decide on whether to enter a market or not.

A few weeks ago, I listened to a podcast interview in which Christophe Gillet, VP of Product Management at Vimeo, gave some great pointers on how to best assess market viability. Christophe shared his thoughts on things to explore when considering market viability. I’ve added my sample questions related to some of the points that Christophe made:

  1. Is there a market? – This should be the first validation in my opinion; is there a demand for my product or service? Which market void will our product help to fill and why? What are the characteristics of my target market?
  2. Is there viability within that market?  Once you’ve established that there’s a potential market for your product, this doesn’t automatically mean that the market is viable. For example, regulatory constraints can make it hard to launch or properly establish your product in a market.
  3. Total addressable market – The total addressable market – or total available market – is all about revenue opportunity available for a particular product or service (see Fig. 1 below). A way to work out the total addressable market is to first define total market space and then look at percentage of the market which has already been served.
  4. Problem to solve – Similar to some of the questions to ask as part of point 1. above, it’s important to validate early and often whether there’s an actual problem that your product or service is solving.
  5. Understand prior failures (by competitors) – I’ve found that looking at previous competitor attempts can be an easy thing to overlook. However, understanding who already tried to conquer your market of choice and whether they’ve been successful can help you avoid some pitfalls that others encountered before you.
  6. Talk to individual users  I feel this is almost a given if you’re looking to validate whether there’s a market and a problem to solve (see points 1. and 4. above). Make sure that you sense check your market and problem assumptions with your target customers.
  7. Strong mission statement and objectives of what you’re looking to achieve  In my experience, having a clear mission statement helps to articulate and communicate what it is that you’re looking to achieve and why. These mission statements are typically quite aspirational but should offer a good insight into your aspirations for a particular market (see the example of outdoor clothing company Patagonia in Fig. 2 below).
  8. Business goals  Having clear, measurable objectives in place to achieve in relation to a new market that you’re considering is absolutely critical. In my view, there’s nothing worse than looking at new markets without a clear definition of what market success looks like and why.
  9. How to get people to use your product – I really liked how Christophe spoke about the need to think about a promotion and an adoption strategy. Too often, I encounter a ‘build it and they will come’ kind of mentality which I believe can be deadly if you’re looking to enter new markets. Having a clear go-to-market strategy is almost just as important as developing a great product or service. What’s the point of an awesome product that no one knows about or doesn’t know where to get!?

Main learning point: Listening to the interview with Christophe Gillet reinforced for me the importance of being able to assess market viability. Being able to ask and explore some critical questions when considering new markets will help avoid failed launches or at least gain a shared understanding of what market success will look like.

 

Fig. 1 – Total available market – Taken from: https://en.wikipedia.org/wiki/Total_addressable_market

1000px-tam-sam-market

Fig. 2 – Patagonia’s mission statement – Taken from: http://www.patagonia.com/company-info.html

screen-shot-2017-01-20-at-07-21-29

Related links for further learning:

  1. http://www.thisisproductmanagement.com/episodes/assessing-market-viability
  2. http://www.mindtheproduct.com/2013/05/poem-framework/
  3. http://smallbusiness.chron.com/determine-market-viability-product-service-40757.html
  4. https://en.wikipedia.org/wiki/Total_addressable_market
  5. https://blog.hubspot.com/marketing/inspiring-company-mission-statements

What is psychographic segmentation?

As a product person, I’m always interested in segmentation as there’s no such thing as a universal customer with the same characteristics or behavioural traits. There are many different ways to identify and target a specific group within a population, and I came across “psychographic segmentation” as a way of segmenting your target audience.

Psychographic segmentation feels very similar to behavioural segmentation, but it also takes into account some of the psychological aspects involved in buying or using a product. These are some of the factors that you can look at when applying psychographic segmentation:

  1. Social class – This aspect divides the population into groups based on the income generated by the Chief Income Earner. This factor is taken into account by the UK Office for National Statistics when they work out the “Social Grade” to determine people’s media consumption and purchasing power (I’ve added a more detailed overview of social grades in Fig. 1 below).
  2. Lifestyle – The key thing that I learned about the lifestyle segmentation model is that there’s no set way of segmenting people based on their lifestyle. There are, however, a number of factors that one can look at. For instance, activities, interest and opinions form a key part of one’s lifestyle. Advertising agency Young & Rubicam invented the so-called 4C model which is often used as a lifestyle classification model. The full name for this model is Cross Cultural Consumer Characterisation and it outlines 7 different personality types and related lifestyles (see Fig. 2 below).

Main learning point: Especially when you’re doing your market research and thinking about the customer segment to concentrate on, psychographic segmentation can be a very valuable tool. It helps you to think about the demographics and behaviours of the target customers that you’re creating a product or service for.

 

Fig. 1 – “Social Grade” overview – Taken from: http://www.ukgeographics.co.uk/blog/social-grade-a-b-c1-c2-d-e

  • Social Grade AB: Higher & intermediate managerial, administrative, professional occupations
  • Social Grade C1: Supervisory, clerical & junior managerial, administrative, professional occupations
  • Social Grade C2: Skilled manual occupations
  • Social Grade DE: Semi-skilled & unskilled manual occupations, Unemployed and lowest grade occupations

Fig. 2 – Young & Rubicam’s 4Cs model – Taken from: https://frameshortfilmjamie.wordpress.com/category/young-and-rubicam-4cs/

  • The Explorer – Need for change, discovery and desire to be different.
  • The Aspirer – Looks at how others view them, tries products for the visual looks and focuses on their status.
  • The Succeeder – Strong goals and tends to be responsible. An aggressive attitude to life as they look for control.
  • The Reformer – Intellectual and tolerant. Doesn’t buy products just because they’re new, the reformer looks for enlightenment.
  • The Mainstream – Desire to fit in with society. Sticks with value for money, striving for security.
  • The Struggler – Has the ‘You Only Live Once’ approach. Focus on the present, looking for a sense of escape.
  • The Resigned – Has unchanging values. Is likely to stick with what there’re familiar with.

 

Related links for further learning:

  1. http://www.marketing91.com/psychographic-segmentation/
  2. https://www.examstutor.com/business/resources/studyroom/marketing/market_analysis/8_psychographic_segmentation.php
  3. http://www.marketing91.com/behavioral-segmentation/
  4. https://blog.udemy.com/behavioural-segmentation/
  5. http://www.ukgeographics.co.uk/blog/social-grade-a-b-c1-c2-d-e
  6. file:///Users/Marc/Downloads/4cs.pdf
  7. https://frameshortfilmjamie.wordpress.com/category/young-and-rubicam-4cs/

 

 

Book review: “Crossing the Chasm”

I recently read both Crossing the Chasm and Big Bang Disruption, which are two books covering a similar topic: how do you position and sell innovative products in fast pace market?

“Crossing the Chasm” by Geoffrey A. Moore was first published in 1991 and talks about how to bridge the “chasms” which can occur in the traditional “Technology Adoption Lifecycle” (see Fig. 1 below). This traditional model depicts the transition from a market solely for “innovators” and “early adopters” to reaching a mainstream audience.

In his book Geoffrey A. Moore, describes two cracks in this traditional bell curve. Firstly, a chasm between “early adopters” and the “early majority”. An approach to market that works for early adopters might not work for more mainstream users of the product, or vice versa. Secondly, Moore talks about a chasm between the early and the late majority, pointing out that each market has its own dynamics.

Moore’s advice with respect to crossing these chasms sounds fairly straightforward: “make a total commitment to the niche, and then do your best to meet everyone else’s needs with whatever resources you have left over”. I like how Moore then goes on to break down customer segments into related target-customer characterisations and scenarios (see Fig. 2 below).

Once you’ve established the specific market niche that you want to target, you can then start creating a strategy for developing this market. Moore provides a very helpful market development strategy checklist (see Fig. 3 below).

The other key thing which I picked up from Crossing the Chasm is the “Whole Product Concept”, which idea was first described in The Marketing Imagination by the late Theodore Levitt. This concept is quite straightforward: There is a gap between the marketing promise made to the customer – the compelling value proposition – and the ability of the shipped product to fulfil that promise. The Whole Product Concept identifies four different perceptions of product (see also Fig. 4 below):

  1. Generic product – This is what’s shipped in the box and what’s covered by the purchasing contract between the seller and the buyer.
  2. Expected product – This is the product that the consumer thought she was buying when she bought the generic product. It’s the minimum configuration of products and services necessary to have any chance of achieving the buying objective of the consumer.
  3. Augmented product – This is the product fleshed out to provide the maximum chance of achieving the buying objective.
  4. Potential product – This represents the product’s room for growth as more and more ancillary products come on the market and as customer-specific enhancements to the system are made.

Main learning point: Things have changed quite significantly since Geoffrey A. Moore first wrote “Crossing the Chasm”. The pace of new technology introductions has probably increased tenfold since the first publication of the book, with businesses concentrating hard on making technology products as accessible and mainstream as quickly as possible. “Crossing the Chasm” nevertheless contains a number of points which I believe are almost timeless: thinking about target users and their scenarios, and the concept of a minimum product configuration that fulfils customer needs.

Fig. 1 – The Technology Adoption Lifecycle by Joe M. Bohlen, George M. Beal and Everett M. Rogers – Taken from: http://blog.ftfnews.com/2012/11/01/transforming-uncertainty-into-opportunity/

talbellcurve_single1

Fig. 2 – Geoffrey A. Moore’s template for creating a target user characterisation and scenarios – Taken from: http://torgronsund.com/2011/11/29/7-proven-templates-for-creating-value-propositions-that-work/

Template

For  ____________ (target customer)

who ____________  (statement of the need or opportunity)

our (product/service name) is  ____________  (product category)

that (statement of benefit) ____________ .

Sample(s)

For non-technical marketers

who struggle to find return on investment in social media

our product is a web-based analytics software that translates engagement metrics into actionable revenue metrics.

Scenario / A day in the life (before)

  • Scene or situation – Focus on the moment of frustration. What’s going on? What’s the user about to attempt and why?
  • Desired outcome – What’s the user trying to accomplish and why is this important?
  • Attempted approach – Without the new product, how does the user go about the task?
  • Interfering factors – What goes wrong? How and why does it go wrong?
  • Economic consequences – So what? What’s the impact of the user failing to accomplish the task productively?

Fig. 3 – “The Market Development Strategy Checklist” – Taken from: Geoffrey A. Moore – Crossing the Chasm, p. 99

  • Target customer
  • Compelling reason to buy
  • Whole product
  • Partners and allies
  • Distribution
  • Pricing
  • Competition
  • Positioning
  • Next target customer

Fig. 4 – “The Whole Product Concept” by Theodore Levitt – Taken from: http://technotrax.tumblr.com/post/93541189402/classifying-market-problems  

original metaphor

Related links for further learning:

  1. http://blog.ftfnews.com/2012/11/01/transforming-uncertainty-into-opportunity/
  2. http://www.huffingtonpost.com/jeff-bussgang/scaling-the-chasm_b_6478622.html
  3. http://torgronsund.com/2011/11/29/7-proven-templates-for-creating-value-propositions-that-work/