Thanks to Steve, Jeff and Mike for their insight. You all make great points. I’m going to align with Jeff on the first step is to establish the goals for the product launch. Any tactics and strategy will suffice if there are no defined launch goals. The effort will be all over the map, not aligned with the goals of the business and waste a lot of money - all things where Marketing loses credibility with the management team.
Chen’s next step is to establish the goals for his product launch, but before he does he needs to meet with senior management to understand their primary goals for the year. After meeting with the CEO, VP Marketing and VP Sales, it’s determined that the management goals for the year are to increase revenue by 50%, improve customer retention from 70% to 80%, and to increase the awareness of Widget Software in the market by 10%. Improving revenue is the most important of the three goals.
So armed with the knowledge of management’s goals, Chen starts the educated guesswork (strategy) of establishing a revenue goal. Since there will only be new customers for Widgetizer, he can’t affect the customer retention goal. Since Widgetizer is new, the awareness of it is 0%.
No Sales History
Chen assembles a small team to arrive at a revenue number for Widgetizer. Robin, the product manager, forecasted $20M in revenue over 3 years in the Widgetizer business case. But before putting his reputation on the line, Chen wants to understand what it will take to sell Widgetizer. Since there is no previous sales history he works with a few sales guys he trusts and maps out a sales cycle. They also strategize on who is likely to be involved in the sale.
Realizing there are large gaps in their guesswork, Chen collaborates with Robin and they begin the process of narrowing the gaps by interviewing 10 potential Widgetizer customers. They would like to interview more prospects but they don’t have the luxury of time. The goal of the interviews is to understand:
- The buying criteria
- The path to a buying decision (are there others involved that aren’t obvious?)
- The length and steps in the buying cycle
Knowing this information would be a solid starting point for developing a defendable revenue goal for Widgetizer. While some of this information was postulated by Robin in the product planning process, the type of detail that is needed now is around how to sell, not what should be in the product. It will be fundamental to training the sales team.
After the interviews Chen and Robin discover that the buying process and the people involved in the buying decision are different than the Widget Software team is accustomed to. This could cause a disconnect with the sales team and cause them to avoid selling Widgetizer. There were disconnects on three key dimensions:
- A different buyer is involved in the sale (VP Operations)
- A different price point (Widgetizer is priced higher than other products sold by Widget Software)
- A distinctly different sales cycle
The Revenue Goal
Based on a realization that there will be some significant sales training involved Chen establishes it as a significant risk factor in the success of the Widgetizer product launch. Chen and Robin agree that a first year revenue goal of $1M is reasonable and meets with the management team to make their recommendation, supported by their research and findings.
What will management say? Is the revenue goal far lower than expected? What kind of pushback will Chen receive?