Innovation Step 5: Hitting the market just like a bowling strike

Montreal, 22 September 2013

There comes a time when your innovation must hit the market.  Launch is always a nerve-racking moment.  This is because we often have at best just an educated guess of what the client really wants.  Clients are moving targets.  They are constantly lifting their expectations, are a little less loyal every day and technology serves them better at every new product cycle.

We have advocated in our Innovation Steps 1 to 4 to stay close and work with your customers.  As a matter of fact, if you have deftly done so, customers and stakeholders will have actually worked for you and directly contributed to your project. They would have told you some of their secrets.

Still, is the marketing of your innovation best summarized as ‘a shot in the dark’?  To help you zero in on your target, we propose three simple tests. They are meant to ensure you will build a sufficient customer base that will give you traction in the market.

Test 1:  Commercial Readiness Level

Test 2:  Engine of Performance Readiness

Test 3:  Hidden Hurdles for a Customer Base

TEST 1 – COMMERCIAL READINESS LEVEL

To what extent is your commercial strategy in or out of sync with your product development?

Product development often follows guidelines such as the Technology Readiness Level (TRL) from NASA, stage gates, critical milestones, etc.  Guidelines abound.  Yet it is not unusual to witness a dir e lack of investment in the development of a sturdy commercial strategy, thereby putting at risk the whole project.

Here is a single scale to see whether you have covered all the bases or that you are left dangerously trailing the curve. It is a practical tool  presented as a quick guideline in the context of a position paper. Much material would merit to be expanded for each CRL.

COMMERCIAL READINESS LEVEL (CRL)

• CRL 8:  Fundamentals to sustain growth
• CRL 7:   Organisation, deployment, results
• CRL 6:  Go-t0-market commercial strategies
• CRL 5:  Positioning and value proposal
• CRL 4:  Buyer’s criteria and buying process
• CRL 3:  Mapping of market segments
• CRL 2:  Choosing best industry and application
• CRL 1:  Broad commercial diagnostics

Discoverers and inventors need to focus at the start on CRL 1 to 3.  Start-ups will often struggle to tackle CRL 4 to 6.   This is the pre-commercial marketing job.  You skip those steps and your venture will be lined up for ‘a shot in the dark’ marketing strategy.

SMEs will concentrate on CRL 4 to 7.  They usually do a half-good job in this area.  But if you have diligently applied Innovation Steps 1 to 4, you should have clarified a good deal of the customer issues.  And you should have a fair understanding of the real purchase criteria to earn a favourable landing zone in the market.  CRL 4 to 7 are meant to be the experimentation steps in the market learning curve, from pilot projects to full scale launch. Lastly, digging into CRL 8 will further increase the odds of success in the market place.

Large companies usually cover most of the eight steps.  But quality of work varies greatly.  A common mistake is to work on a major project that has not been anchored on the customers ‘needs in the first place. They are at risk of a’market gap’.

CRL is critical and here is why! There is a dramatic difference between ‘first to market’ and ‘first to win approval from users’.  First to market with poor CRL are likely to be taken over by quick followers with high CRL.  First-to-win-approvals take a commanding lead that is hard to dislodge because of the established habits, tastes and preferences they create.  In a nutshell, they are the first to establish their brand.  This is how innovators take a dominant position in market share.

TEST 2 – ENGINE OF PERFORMANCE READINESS

At one point product and commercial development are reaching the end of their development phase. However a nagging question may have remained behind the scene:  To what extent has the performance engine of the company be tamed to readily integrate the innovation into its ranks and operations for scale-up?

A meaningful innovation is always seen as disruptive for the performance engine.  The performance engine feeds on efficiency, repetition, standards and predictability.  It works at keeping costs down and minimizes spare capacity.  It drives goals, objectives and bonuses.

Resistance will have many faces. Marketing will be worried about the risk to the brand.  Sales will be reluctant to push a product with no track record.  Finance will be concerned about lower margins and short term ROI.  IT will especially resist another special project.  Production will balk at the idea of short production runs.  The list goes on.

In other words, even before the market risks jostle with us, there will be internal operational risks at play.   If an isolated project champion plays Don Quixote with the performance engine, he is most likely to fail against astute resistance.  On the other hand, a team leader runs a better chance if he has prepared the ground using superior collaboration and coaxing skills with the performance engine, and if he benefits from a help line linked to the top.

At the end, the test is not about whether or not there will be resistance, but rather from where will it come from?

TEST 3 – HIDDEN HURDLES TO ESTABLISH A CUSTOMER BASE

The hidden hurdles are often the small customer details you wish you had known at the outset, but that you discover only too late, if at all.  They are the small things, benefits or irritants, that tilt behaviour into a purchase or not, often without your knowing.

Consider some examples:

a) The missing answers to important questions related to the pain point; questions as formulated by the customer.

b) The critical incidents in the purchasing process: the bugs that could kill a sale.

c) The moments of truth in the usage of the product that provide high utility to the user

d) The magic bullets or little extras that make the emotional experience exceed the expectation!

Customers don’t buy a product but their benefits.  Some benefits are obvious, fairly tangible and easy to promote. But some others remain hidden in the customer’s head for a good time.  But they do influence the purchasing criteria or the repeat buying act.

These subtle signals can be found scattered in the whole transaction process:  From purchasing to delivery,  in the sale transaction itself, in the relationship, in customer service, in the experience of the product, etc.  They are hard to discover but worth their salt.

But if you can find a few of them and bundle them in your customer engagement strategy, you might just pick up the minimum sales to build your early customer base.

These three tests are warning lights about your own readiness to commercialize your innovation.

Green lights or red lights?

André Du Sault, MBA (LBS), MPA (Harvard)

C 514 777-1538

sdaconseil@sympatico.ca

www.dusaulthaddad.com