24 key practices for creating and delivering globally competitive products & services jan 26 2012...

Copyright 2012 - LÛCRUM MARKETING

24 Key Practices for Creating and Delivering

Globally Competitive Products & Services

Presented by:

Tom Evans

Lûcrum Marketing

January 25, 2012

High New Product Failure Rate

• Only one product concept out of seven becomes a new

product winner; and 44% of businesses’ product

development projects fail to achieve their profit targets.

• One out of four development projects succeeds

commercially. (75% failure rate)

Robert G Cooper


Why New Products & Services Fail

• Product did not solve a problem that many were willing to

pay to solve

• Product did not adequately meet the market need

• Company did not sufficiently understand their customers

business and the value delivered to their customers

• Product did not align with business strategy (or no clear

business strategy)


Typical Business Approach

• Internally Driven

– Create a product/service, look for a problem to solve

– Driven by technology or internal ideas

• Sales Driven

– Pursue opportunities with no clear strategy

(opportunistic)

– Product/service changes for each new opportunity


The Role of Marketing

The aim of marketing is to know and understand the

customer so well that the product or service fits him and

sells itself.

Peter Drucker



Key Themes to Creating Globally

Competitive Products & Services

• Identify a Compelling Market Opportunity

• Deliver a Compelling Solution

• Build a Compelling Market Development Strategy

Compelling Marketer Model

for Product & Market Success






Identify a Compelling Market Opportunity

• Key Questions to Answer

– Is there a real/valid market opportunity?

– Is this an opportunity for your company?

– Do you have a competitive advantage?

– Does this result in a compelling business case?

• Key Considerations

– Do this for every new market opportunity





Key 1 – Articulate Business Strategy

• Key Question

– Without a clear understanding of your business

strategy, how can you determine if you should pursue a

business opportunity?

• Key Elements

– Vision & Mission

– Core competencies & target markets

– Company positioning & brand promise

– Competitive advantages


Defining Your Business Strategy

• Done by founders / top executives

• Should be done when company is founded

• Review on an annual basis

– Has the market changed

– Are we following the strategy

• Typically requires adjustments every 3 - 5 year


Key 2 – Validate the Market Problem

• Key Question

– What are the big painful issues

– That many in your target market

– Are willing to pay to solve

• Key Elements

– Market Evidence of potential problem

– Form a hypothesis around the problem

– Test hypothesis via research

– Repeat until validated


Validating the Market

• Start with Hypothesis

– Market Segment “X” has problem “Y” and we can solve

it by doing “Z”

• Speaking to potential customers

– Most companies don’t and won’t do this

– Significant time investment

– Requires many conversations (cold calling)

• May take over 100 conversations to validate.

• You can pay now or pay later


Key 3 – Validate the Product Concept

• Key Question

– Can you solve the market problem with your

envisioned product?

• Key Elements

– Product concept that aligns with your business

– Create low cost way of presenting product

concept

– Present concept and receive feedback

– Repeat until validated


Key 4 – Build Profitable Business Model

• Key Question

– How do we make a profit when selling your solution

• Key Elements

– Delivery Model

– Cost to sell & deliver

– Pricing Strategy


Special Business Model Considerations

• Can you differentiate or create competitive advantage with

your business model?

– Subscription or Usage v. License

– Free (Freemium) – Pay for Premium offerings

• How do you match the pricing model to value received?

– Razor blades, printers

– Usage, Subscription, SaaS


Key 5 – Assess Competitive Landscape

• Key Question

– What are competitors already doing?

• Key Elements

– Competitive Analysis

– Current offerings, target markets, strategies

– Strengths & weaknesses

– Market share

• Don’t forget substitutes & potential new entrants


Key 6 – Justify the Market Opportunity

• Key Question

– Is this a profitable business opportunity for your

company?

• Key Elements

– Description of opportunity

– Alignment with business strategy

– Market size, revenue & profitability potential

– Competitive advantages, differentiation

– Investments required

– Risks & impacts Copyright 2012 - LÛCRUM MARKETING

Key 7 – Prioritize Market Opportunities

• Key Question

– Which market opportunity offers the best return on

investment?

– Many alternatives – new products, new vertical

markets, new geographical markets

• Key Elements

– Define ranking criteria

– Assign team to make decision

– Make trade-offs of budget & opportunity


Selecting Opportunities

• Must involve all key executives and board members

• Cannot invest in all opportunities

• Ensure the best opportunities receive right investment

• Can be evaluated on an iterative basis

– Gating process (e.g., Stage Gate)


Weights 20 25 15 10 15 20 30 135

Project/Product Strategic Fit Member Sat Market Seg

Attractivness Competitive

Differentiator Feasibility Risk

Financial

Return Project Score

Resource

Requirements Go/Hold

Customer Rewards

Program 5 4 4 5 5 4 4 585 35 Go

Enter Brazil Market 5 4 4 3 5 4 4 565 50 Go



Deliver a Compelling Solution

• Key Question to Answer

– How do you ensure you deliver a solution that solves

the market needs and is competitive?


– Reviewed for each new release





Key 8 – Define Clear Product Vision & Strategy

• Key Goal

– Communicate a clear vision & plan for the solution

• Key Elements

– Description of the Market

– How the product will compete

– Product vision & strategy

– High level roadmap


Key 9 – Solicit Market Requirements

• Key Goal

– Clearly understand the needs of the market (You can’t

define a solution until you know what problem to solve)


– Solicit needs from all stakeholders (buyers, users,

internal)

– Validate & prioritize

– Use various forms

• Advisory councils, customer visits, user groups, etc.


Soliciting Market Requirements


“If I had asked the market what they

needed, they would have told me faster

horses. Henry Ford

Soliciting Market Requirements

• Should focus on problems to be solved (not on features)

• Important phrases

– Why?

– Tell me more about that?

– What’s the impact of that problem?

• Remember your internal stakeholders

– Support, professional services, operations, etc.

– How do you help them better support customers &

decrease costs?


Key 10 – Clearly Specify the Solution

• Key Goal

– Make sure you get a solution that meets the market

needs

• Key Elements

– Market Requirements Document (MRD)

– User Personas

– Problem Scenarios

– Product Requirements Document (PRD)


Defining the Solution

• Market Requirements Document (MRD)

– Talks about market problems/needs

• User Personas

– Description of stereotypical user

• Problem Scenarios

– Describes how user uses solution to solve problem

• Product Requirements Document (PRD)

– Describes product functionality to meet needs


Key 11 – Manage Scope & Schedule

• Key Goal

– Deliver the right solution capabilities on schedule

• Key Elements

– Well defined criteria to prioritize requirements

– Negotiating scope v. schedule

– Managing scope changes

– One person that owns scope

• Understand the Minimum Marketable Features


Using Agile

• Short development cycles

• Benefits

– More predictable development cycles

– Greater visibility into development status

– Faster response to market changes

– Always have a relatively stable product

• Shippable if absolutely necessary


Key 12– Ensure Whole Product Readiness

• Key Goal

– All elements are in place to make solutions usable.

• Key Elements

– Whole Product

• Core Product

• Packaging – documentation, training, implementation & support

services

• Augmentation & Infrastructure – 3rd party tools/applications,

systems, etc. to make the product complete and usable.


Key 13 – Test Market Readiness

• Key Goal

– Confirm product solves market problem.

• Key Elements

– Test functionality in normal usage

– Verify it solves market problem

– Test market strategy




Build a Compelling Market Development

Strategy


– Do you have a well defined target market and know the

right messages to communicate to them to create the

need and desire to purchase your solution?





Key 14 – Define Targeted Market

Development Plan

• Key Goal

– Focus market development efforts

• Key Elements

– Well defined target market

– Define buyer roles and their challenges/goals/needs

– Clear messages to communicate

• Value Proposition – what we do for you

• Positioning & Differentiation – why buy our solution

• Based upon market validation work


What Happens Without Clear Strategy

• Create confusion in the market over what you offer

• You sound like everyone else in the market

• Investments are spread across multiple segments with

little impact

• Sales pursues opportunities that don’t match with the

solution

• Company always responding (chaos)


Key 15 – Establish Effective Channel

Strategy

• Key Question

– What is the best way to sell your solution to your target

market.

• Key Elements

– Sales Model – Direct, Indirect

– Profile/skills of sales team/channel partner

– Sales methodology

– Supporting sales tools


Channel Strategy Considerations

• Often need to establish direct sales before doing indirect

– Validate sales process

– Enablement tools in place

• Create criteria to evaluate potential channel partners

• Establish lead generation programs


Key 16 – Align & Create Marketing/Sales Tools

• Key Question

– Does your marketing & sales tools strategy support

your market & sales strategy?

• Key Elements

– Marketing/Sales Tools for:

• Different market segments

• Different buyers

• Different stages of the sales/buying process


Potential Marketing/Sales Tools

• What tools do you need to move the sales/buying

process?

– Product brochures

– Market Segment Solution brochures

– White Papers

– Presentations

– ROI calculation

– Draft RFP

– Demo

– Website


Key 17 – Create & Manage Launch Plan

• Key Goal

– A defined set of activities to ensure solution is ready for

launch

• Key Elements

– Product Readiness

– Marketing & Channel Readiness

– Company Readiness

– Launch Strategy


Launch Plan (Readiness)

46

Product Readiness (Whole Product)

Support services program

Pricing and packaging

Product availability

Certifications & Regulatory approvals

Testing complete

Documentation

Intellectual Property (Trademarks, Patents)

Warranty Program

Company Readiness

Services & support trained

Manufacturing/Production

IT Systems

Suppliers

Capacity

Marketing & Sales Channel Readiness

Market Plan

Marketing/Sales Tools

Product Backgrounder

Website, Brochures & Presentations

Analysts & Press Kits

Competitor Analysis

References

Sales Channel Enabled/Trained

Launch Activities Defined

Pre-briefs to thought leaders

Market Testing

Press Events

Demand Generation

Advertising

Key 18 – Enable Channel (Sales Enablement)

• Key Question

– Have you adequately prepared your sales channel to

effectively sell to your target market?

• Key Elements

– Sales tools

• Executive level presentation, product backgrounder, Needs

Discovery Guide™, Message Driven Demo™

– Enablement process (training)

– Testing & certifying


Needs Discovery Guide and Message Driven Demo are registered trademarks of The Lûcrum Group, Inc.

Sales Enablement (Base Components)

• Product Backgrounder

– Succinct key elements of market plan

• Needs Discovery Guide™

– Per buyer profile: Challenges / Impact / Capability /

Benefits

• Executive Level Presentation

– High level discussion of how your solution addresses

needs. (10 – 15 slides)

• Message Driven Demo™


Needs Discovery Guide and Message Driven Demo are trademarks of The Lûcrum Group, Inc.

Tips for Sales Enablement

• Focus on just a few key messages

• Keep tools focused & concise

• Train often

• Train all market facing personnel

• Ensure you have executive management support


Key 19 – Generate Awareness

• Key Questions

– How do you make the market aware of the need and

how to solve it?

• Key Elements

– Product evangelism – speaking engagements

– Public relations strategy – 3rd party validation

– Tools to support this – white papers, presentations,

press kits, etc.

– Online marketing


Key 20 - Feed & Manage Sales Funnel


• Key Question

– How do you effectively create leads that result in sales

• Key Elements

– Demand generation activities (into funnel)

– Qualify/prioritize leads

– Manage through the funnel

– Understand the funnel metrics

Managing the Sales Funnel


Lead sources

Cost of lead/sale

Time to sale

Conversion ratios

Leads/Suspects

Prospects

Negotiating

Customer

Target Market



Process & Portfolio Management


– How do you manage your product delivery process and

manage the overall profitability of your portfolio of

products/services?





Key 21 – Managing Product Lifecycle Profitability

• Key Question

– What strategies are requires based upon product

lifecycle to maximize profitability?

• Key Elements

– Where product is in lifecycle

– Understand changes in market & buyers

– Adapt product & strategy


Key 22 – Optimize Product Portfolio Profitability

• Key Question

– Where do you invest limited resources to maximize the

value of product portfolio?

• Key Elements

– Portfolio balance

– Prioritization of investments


Key 23 – Measure Success (Metrics)

• Key Question

– How do you define success and know if you’re

improving?

• Key Elements

– Defined metrics

– Means to measure metrics

– Corrective actions


Example Metrics

• Strategic Metrics

– Product Revenue, Product Profitability, Market Share,

New customers/lost customers, Win/loss ratios,

Customer satisfaction

• Operational metrics (Diagnostic indicators)

– Market sensing activities, Requirement changes, On

schedule development, Time to market, Product

defects/bugs, Support issues, Sales enablement

activities, Product management deliverables


Key 24 – Manage Investment/Risk Decisions

• Key Question

– Do you make the next level of investment in the product

development and commercialization process?

• Key Elements

– Decision Checkpoints

• Product Development

• Launch

• End-of-Life


Decisions Checkpoints


Source: AIPMM – Product Management Framework





Five Priority Practices (to Start With)

The Product Manager Role is Key

Make Companies Market Driven •By understanding and validating their market’s needs,

•Companies deliver products and services that solve their

market’s problems and

•Create messages and positioning that cause customers to

want their products.

Resulting in Increased Revenue & Profit!


Product Management Training


• Mexico City:

– Feb 15 – 17

– Mar 22 – 24

• Monterrey

– Apr 26 – 28

– June 11 - 13

• Guadalajara

– May 17 – 19


Questions

Muchas Gracias! Tom Evans

Lûcrum Marketing

[email protected]

+1-512-961-5267

Skype: tevanstx

Hugo Amezcua

NPD Strategy

[email protected]

818252-2013

mailto:[email protected]




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