The Missing Pieces in Your Product Strategy
Updated: Apr 14, 2021
You’ve identified the target market and the customer pain points. You developed a product prototype and got good feedback from a few potential users. Now your product is launched, the sales team is ready to go, and the marketing plan is in place. You can’t wait for the sales pipeline to explode with opportunities and closed deals.
Instead, interest is anemic, sales cycles are long, and closing any deal seems to require a (sometimes deep) discount. Why?
As much time and energy companies invest in developing new products, they often skip one of the most critical steps: gauging whether prospects will actually buy their product once it’s available. It’s one thing for prospective buyers to say they like your solution. It’s another for them to actually commit to purchasing it.
The time to figure out if your product meets an important market need is during the market validation phase, by uncovering the right information. Here are four important areas to drill into if you want to increase the success of your new product:
Is the pain you are solving painful enough? You might uncover a market pain point, but how urgent is the need to fix that pain? How much more urgent are other organizational challenges compared to the one you are trying to solve? Connected to this is, how pervasive is the problem or challenge across the market segments you are targeting? You may have validated the problem among a small sample of prospective buyers, who also gave your proposed solution a thumbs up. But unless you validate the urgency of the pain across the broader market segment, chances are you won’t gain traction. The more customer and prospect data points, the better.
Is there a perceived risk or bias against change among your target companies? Most B2B purchases involve multiple decision makers and influencers, and if your product requires integration of some type, or replacing a solution that an organization has been using for some time, you may hit roadblocks. Understand how your product impacts the needs and priorities of the organization as a whole, and the level of effort required to replace an existing solution with yours. Be prepared to explain the overall ROI for the company if they choose your product over what they’re using today.
Is your value proposition crystal clear or is it blurry? Why does your product exist? What does it do and why does it do it better than competitive solutions? If your product positioning and messaging isn’t clear, buyers won’t be motivated to consider what you have to offer. If you can’t articulate what your solution will deliver in terms of the value your buyer is seeking – whether that’s cost or time savings, improved productivity, higher profits - in a way that is meaningful and measurable, then your pitch falls flat. Know what results your buyers expect from your product and build that into your value proposition and messaging before you launch.
Are target prospects willing, ready and able to buy? What are people willing to pay for your product, and do they have the budget to make it happen? Many things influence willingness-to-pay, including competitive pricing and market conditions, in addition to what’s been discussed in this post. Pricing strategy isn’t easy and may take a few iterations but be sure to start with customer data. Ask prospective customers directly what they’d be willing to pay for your solution. You can probe pricing questions during interviews, or via surveys. Common questions include:
- At what price point do they think the price is so low that they’d question the quality?
- At what price would they consider the product to be so expensive that they would not consider buying it?
- At what price would they consider the product starting to get expensive, so that while it’s not a deal breaker, they’d have to give more thought to buying it?
- At what price would they consider the product a great investment for the money?
Building successful – and profitable – products come from market insights, and this requires asking the right questions, drilling a bit deeper into the heads of target buyers, and a willingness to set aside your own perceptions and biases. While this may take a bit more time upfront, it will lead to comprehensive and objective data to fuel a winning product and go-to-market strategy.