Editor’s note: Bill Warner is managing partner of Paladin and Associates. This is the first of two parts; the second will be published Thursday.Knowing that you have, or will have, a winning product does not give you time to rest.
You have to grease the skids by making your buyers aware that you have a product that solves an important problem they have. Founded upon your in-depth understanding of your buyers, you need to structure the appropriate marketing campaigns that raise buyer awareness of the product’s value and availability.
But, that’s not enough either. You will also have to make all the sales channel partners that sit between you and the buyer also know of the value and availability of the product. All this is needed to get your product from your facility into the hands of the buyers.
Know how the buyer buys
Almost always, it is not obvious how the buyer actually buys. Knowing this is the subject of millions of dollars that some companies spend in order to introduce products to the consumer retail industries. Advertising agencies and research firms get rich figuring this stuff out.
The best way, and a lot cheaper, is to ask them yourself. Approach representative examples of your buyers and ask them how they purchase products in your market segment. Answer these questions:
- Whom do they buy from
- Where do they learn about new products
- What are the payment requirements
- What incentives are offered
- What are the terms and conditions for the purchase
- Is credit required
- What are the price ranges
There will be many additional questions, depending on the market segment and product, but the idea is to thoroughly understand what will influence the buyer’s decision.
Who does the buyer’s seller buy from?
If you followed the heading for this paragraph you realize that there is a food chain of buyers and sellers that extends from your back door all the way to the consumer of your product. This food chain is made up of the likes of:
- Manufacturers representatives,
- Valued added resellers and
Each of these points in your food chain offers some additional value and takes a cut of the sale. In order to get your product to market, you will have to understand the entire food chain that exists between you and your buyer.
As you did with the ultimate buyer, you will have to understand each of the points in the food chain for your business. They are buyers too. You will need to know many of the same things, plus:
- Discounts expected,
- The value added they provide,
- The incentives that will have to be offered,
- The training requirements and costs, and
- Basically how the flow of goods through these channels works.
This can be mind-numbing work, but is very necessary in order to not have surprises that could stop your business later. Many hours spent on understanding the distribution channel can save you from a whole lot of costly mistakes later when you are trying to get the revenue for your hard work.
Part Two: What’s your value proposition?; creating push and pull
Bill Warner is managing partner of Paladin and Associates. You can reach him via e-mail (firstname.lastname@example.org) or phone (919 570-1023).