Launch Clinic

Your product launch won’t be successful if your sales team doesn’t trust you

Have you noticed that your sales team isn’t very excited about your next product launch? You’re getting a “yeah, whatever” vibe from them and it’s driving you crazy. So crazy you’re at the point of believing the launch goals are in jeopardy, and you should.

How did the last launch go?

This problem started with a previous launch; probably the last one. You know, the one where you got the Sales team all hyped up and then failed to deliver. It’s another checklist product launch that crashed and burned.

They didn’t get hyped up because of the product. They got hyped up because they believed the product was going to be the fast path to reaching quota.

This idea was set in motion perhaps by you (or the CEO, or development, or…), and you were a hero until your sales guys realized that the product a) was much harder to sell, b) took much longer to sell, c) wasn’t as interesting to buyers as they were led to believe.

Now you have an uphill battle on your hands.

Hero to zero

Your salespeople stopped selling the old product and focused their energy on selling the products in the portfolio that would help them make quota. By this time they’re behind and they are pissed off (sorry, Mom) they were led down this garden path that wasted their time.

Their sales leadership didn’t really care that the new product wasn’t selling. They wanted answers to why quota wasn’t being hit. And when they found out it’s because the team was selling a product that buyers weren’t buying, they were told to stop selling it immediately.

And they won’t soon forget.

Brute force produces temporary results

You might be thinking that since everything is dialed in the next launch, you can get the CEO to force the sales team to sell the product. If they were required to sell X dollars of the product as part of their compensation they would see what a great product it is, and sell even more of it.

Don’t count on it. This is about compensation not about the product. The sales effort will be superficial just to make a point. The result will “prove” the product doesn’t sell and the CEO will drop the mandate.

And you’ve lost even more trust.

A stick doesn’t work so try a carrot

The pressure is on for you to deliver a successful product launch. You know your sales team will be skeptical and you have your work cut out for you. Don’t try to fix the trust problem all at once.

First, consider your audience. We hire sales guys to sell stuff, not to be product experts. Always keep that in mind and you will make good choices.

Next, focus on enabling your sales team to sell (notice I didn’t say “sales training”). I’ve covered this in previous posts:

3 Tips for Product Launch Marketing Success (part 1)

3 Tips for Product Launch Marketing Success (part 2)

3 Tips for Product Launch Marketing Success (part 3)

By enabling your salespeople with the knowledge they need to move a buyer through the buying process, they’re more likely to listen and embrace what you’re sharing with them. Continue down this path and you’ll regain trust and be viewed as a partner in helping them achieve quota, not a supplier of stuff when they want it.

Product Implementation Complexity and Product Price

Have you factored the implementation complexity of your product when establishing the price? By implementation complexity I mean the level of effort it takes for your organization to deliver the product to the buyer in a usable form. As implementation complexity increases you should expect to support a higher product price, as long as a corresponding value is delivered.

A simple way to illustrate this is with the following Product Price vs. Implementation Complexity chart.

The one quadrant to avoid is a product with a low price and a high implementation complexity. It’s a dead-end.

The chart below plots some products you may be familiar with and how they fall into the Product Price vs. Implementation Complexity chart.

Lower Price / Higher Implementation Complexity

The quadrant to avoid is the Lower Price / Higher Implementation Complexity quadrant. A product currently in this quadrant is GPS fleet tracking solutions. These are solutions that enable businesses to record and track the usage of the vehicles in their fleet. From an implementation perspective these are complex systems. A hardware component must be wired into a vehicle. It may require the installed of an external antenna. Once installed, the hardware must be tested to ensure it communicates over a wireless (cellular) network. Keep in mind customers rarely have all their vehicles in one place at one time, so it may require chasing vehicles to job sites often after normal business hours. Typically this requires a qualified technician to perform the installation with coordination from a customer service rep to verify the system is working. Vehicle by vehicle. After that is complete the customer needs to be trained on the use of the software. Customer service issues are chronic and unavoidable. Wireless coverage is incomplete and results in customer confusion. GPS units break. Employees find the units and try to disable them.

From a business model perspective the GPS fleet tracking businesses appear to have tremendous potential. Unfortunately few have delivered on that potential, are poorly capitalized and lose money. One shining example is Qualcomm. Qualcomm carved out a profitable niche with long-haul trucking companies and they charge a premium for their solution. More recently the sale of @Road to Trimble was engineered by founder Krish Panu. The exit was perfect timing.

For some customers GPS fleet tracking systems provide extraordinary value. Unfortunately the industry was heavily influenced by executives from the wireless industry that brought with them a low price/high volume philosophy. From the beginning they established commodity pricing long before there was justification to do so. Given the complexity described above, the typical selling price for these systems should be higher. The hardware sells for around $500 which often includes the installation cost. Monthly fees are charged for the use of a hosted software application and airtime (cellular data transmission) in the $20 to $30/month per vehicle range. Margins are thin and can be wiped out by just a few service calls. Qualcomm commands a price that is significantly higher and justifiable for the value they deliver.

So what can be done when your product is in the Lower Price / Higher Implementation Complexity quadrant? Two things. First, find a way to charge a higher price. You may able to do this by carefully segmenting your markets and identifying where delivering a high value in a segment can justify a higher price. Second, lower the implementation complexity. Carefully analyze your implementation process and find opportunities to simplify implementation.

Summary

Understanding where your product fits in the Product Price / Implementation Complexity continuum can give you tremendous insight that can help you with pricing and deciding on the most effective sales channels. If you’re in the no-mans land of a low price/high implementation complexity you need to identify a strategy for moving out of the situation as quickly as possible.

Services Marketing Requires a Different Approach

Why is Services Marketing Different?

Marketing services is distinctly different from marketing products and requires a different approach. Within the technology space services exist as a standalone business such as IT Services and as a supporting component of a product, such as training or implementation services

In this post we’re going to examine the characteristics that make the marketing of services unique and look at techniques that can be used to grow a services business.

Selling the Invisible

Services marketing is often referred to as “selling the invisible” because the buyer purchase is intangible. Services are not physical and cannot be possessed or inventoried. Additionally, there is nothing you can do to make services tangible.

Delivery Cannot be Separated from Production

People deliver services and the production of the services cannot be separated from the production of the services. Examples would be a haircut, a medical exam, installing software, or diagnosing a network problem.

Quality and Consistency Vary

Service quality and consistency are subject to great variability because the delivery of the service can change so much due to people factors and due to customer requirements. Ultimately the buyer will never know for sure how good the service is until it is delivered.

Delivery Involves a Process

Usually there is a process involved in the delivery of a service, either formally or informally. In the case of Launch Clinic, we use the Product Launch Framework as a methodology for planning and managing a product launch.

Pricing May Vary for Similar Services

Pricing may very for similar services

Techniques to Consider

If you are early in the process of getting your services company off the ground you will want focus on a few items that should make a significant impact on your selling process.

Reputation of the Founders

The early gigs you get for the services you deliver are going to be on the strength of the founders’ network and reputation. Work your network to get those initial customers and do whatever it takes to get testimonials and references.

Have a Documented Methodology

As a service provider you should have a documented methodology that you use to deliver your services. The methodology demonstrates your approach to delivering the services that leaves an impression in the buyer’s mind that your process isn’t open ended. The methodology tells your buyers that you know what you’re doing and you’re not going to “wing it”.

The methodology helps to convey to your prospects that you will deliver a level of quality and consistency.

Customer References and Testimonials

For a service provider nothing can have more impact than when your customers lavish praise on your company’s ability to deliver. Work carefully and methodically to cultivate and document that praise and don’t be shy about sharing it with your prospects and other influencers. The best way is to ask and to keep vigilant for testimonial opportunities. Think “Can I quote you on that?”. The quotes an be used on your web site, in your marketing materials and in your sales process. It’s easily one of the most important things you should strive to achieve.

Focus on the Value You Deliver

Customers want to know what you can do for them, not what you do. Depending on the service you deliver it may be important to indicate which technologies your team is competent with. However, it’s more important to convey the value you can deliver and why your company is the one to deliver that value.

The Service Essence

After working in lots of roles throughout my life, I’ve come to appreciate the benefits of working in the restaurant industry more than most from a service perspective. Carfi’s post from Chicago reminded me of that.

I don’t often think back to being a waiter (oh the ramen noodle days), but I do recall getting most of my customer centric approach to service from being a waiter. Loyalty and ongoing spend was more important than the margin of any given interaction. Some things are always transferable and relevant. That being said, this is a under appreciated adage.

I had a job at a Big Boy in Ypsilanti, MI. I mainly liked worked days because I got free food, I lived on slim jims, patty melts and cole slaw. Nevertheless, I was rapidly indoctrinated in the restaurant way of life. The whole essence of a restaurant is service.

This guy who managed me at the big boy – put it fairly well “These people are paying for service or they would have done it themselves – so serve”. That is almost an exact quote and clearly great leadership skills for a bunch of college kids. As a person who loves a good meal and good service, I’ve come to take it almost for granted.

Not only do we take it for granted as consumers, we wildly forget about it in our daily interactions and overall management of our products and businesses. If someone didn’t want service they would do it themselves - hmm.

While not practical in some scenarios - I’m not going to build a car, but I do still buy service when I get a car. Service is a key influencer in buying and the general experience of being a customer is an important part of the product.

Essentially the age old adage of the “customer is always right” may be a concept of yesteryear in many industries and may have never existed in some industries. I mean it wouldn’t be an adage if there wasn’t something to it - right?

The good news is what’s old is new again - the social customer is here!

So what is it that consumers are entitled to? How can a business drive extended value for both themselves and the customer? Loyalty should be a variable for most of your product decisions, but definitely in ALL customer interactions.

The informal word of mouth impact is gaining momentum thanks to web 2.0. With the increasing relevance of social networks, word of mouth is increasingly more important within the corporate decision making process, the customer may be right right again! Back to the future! This whole “interweb” thing is working out.

I know at times it clearly appears the customer isn’t right at the end of quarter or when analyzing margin, but really? To better understand what a social customer is:

THE SOCIAL CUSTOMER MANIFESTO

• I want to have a say.
• I don’t want to do business with idiots.
• I want to know when something is wrong, and what you’re going to do to fix it.
• I want to help shape things that I’ll find useful.
• I want to connect with others who are working on similar problems.
• I don’t want to be called by another salesperson. Ever. (Unless they have something useful. Then I want it yesterday.)
• I want to buy things on my schedule, not yours. I don’t care if it’s the end of your quarter.
• I want to know your selling process.
• I want to tell you when you’re screwing up. Conversely, I’m happy to tell you the things that you are doing well. I may even tell you what your competitors are doing.
• I want to do business with companies that act in a transparent and ethical manner.
• I want to know what’s next. We’re in partnership…where should we go?

I clearly think we are all social customers, perhaps we need to be more mindful social product managers.

On a random note, I’ve been struggling to develop a business metaphor around FIFO. Ideas?