It happened again. We’ve observed another software vendor that released a new product that has generated almost no sales
in the first year and which faces an increasingly grim outlook.
does a vendor with an otherwise successful track
record in their bread-and-butter market fail so miserably?
The answer is a lack of insight into both
channel and end-user requirements—insight that could be
obtained through primary market research.
We’ve seen this scenario play out time and time again, with millions wasted and many people fired. Two
instances come to mind where products were launched with no evidence of market or channel demand, only to see them fail.
Does This Sound Familiar?
The first example comes from a software vendor
whose engineers came up with an interesting
concept that was a spin-off of a successful,
I was recently asked what book recommendations I would make for fellow entrepreneurs. I started Innovaxis Marketing Consulting business six years ago and the most influential book I’ve read since then is Blue Ocean Strategy. In it, co-authors W. Chan Kim and Renée Mauborgne identify how and why some businesses transform their industry, such as how Yellow Tail transformed the wine industry. They also identify a formula for how these strategies are repeatable—the single largest piece missing from other business books, from my experience.
Here at Innovaxis, our clients utilize our market research, competitive intelligence and product management services in order to apply Blue Ocean Strategy into product roadmap, marketing feasibility and product development efforts.
Additionally, I really like the following books:
- How to Become a Rainmaker: The Rules for Getting and Keeping Customers and Clients by Jeffrey Fox
- How to Become a Marketing Superstar: Unexpected Rules That Ring the Cash Register also by Jeffrey Fox
- The Tipping Point by Malcolm Gladwell
- From Good to Great by Jim Collins
- Pursuit of Wow by Tom Peters
In Marketing 101, we are all taught to believe that customers and clients are always right. But what if they cannot articulate what they want, especially when it comes to new products and services?
This often happens when they have a problem and there is no current technology or solution that addresses their need. To illustrate this point, Henry Ford famously said, “If I had asked people what they wanted, they would have said, ‘faster horses’.”
Pro Audio Example
For example, we worked with a professional audio equipment manufacturer whose customers said they needed a cover for their sound system equipment to prevent mischievous audience members from meddling with the well thought-out parameters set up by an audio professional.
Rather than making a cover, which people could still get around with paper clips and the like (which happened on competitive products),… Continue Reading >>
Time and time again, we’ve found that any given market has at least 3-4 main segments. Many of their requirements overlap, but there are always key differences. Are you marketing to these market segments and, if so, do you know which are the most profitable?
For example, in the commercial document scanner market, we found three main types of resellers through market research: System Integrators (SI), Hardware Resellers and Services Firms. The SIs offered hardware installation as just one of their services, so they sold many scanners at a fat margin because they are a smaller part of the sale and can be marked up nicely. Hardware Resellers sell only hardware, sell in high volume and at the lowest price (and margin), so they always complained to manufacturers about price because, to them, scanners are commodities.
Services Firms mainly provide maintenance but sell only a few scanners when they give out.… Continue Reading >>
If the market is large and growing, we can become millionaires if we just show up and only get 5% market share, right? Wrong.
One of our clients (who shall remain nameless) exhibited this “Show Up and Win” mentality and launched a series of new products without once asking their customers what they wanted or their distribution channel partners if they would sell these new products over the existing products they had sold for years. The result: even in an exponentially growing market, they could only win <1% of the overall market. Why?
Even if the product were in tune with the customer requirements that would generate the most sales (it wasn’t because they didn’t talk to any customers or channel partners before launch), even great products don’t always “win” even if they are the “best” (see Betamax vs. VHS).… Continue Reading >>
Need to find out how much a competitor and/or their channel is charging for their products and services? Want to gauge another company’s responsiveness and customer service? Need to do all of the above without them knowing it’s you? Then B2B mystery shopping may be what you seek.
- Document imaging software
- Office technology service contracts
- Video conferencing services
- Hazardous-duty lighting
- Residential construction
- Security systems
- Engineered valves
- Powder actuated tools
- Construction fasteners
- Circuit breakers
- Conduit and wire
- Printer cartridges
- Specialty paper
Gartner, Forrester, IDC, Frost & Sullivan–all these analyst firms do good work, giving us a good handle on macro trends in the market.
However, what happens when you need to size the market, your brand share and growth for, say, wireless microphones sold through music instrument (MI) resellers? How about production document scanners sold through document imaging resellers? Or how many miles of trenchless sewer technology have been used in the last 10 years? No analyst report on the planet contains this information.
We’ve also found that analyst firms rarely size the market by interviewing resellers, distributors and other channel partners. If you rely only on manufacturing data, you will have little understanding of how these products go to market. And how do we know the data is accurate, especially for privately held firms if we don’t have the channel data to model up and compare with what the manufacturers report?… Continue Reading >>