Editor’s note: Bill Warner is managing partner of Paladin & Associates. Warner is also a past instructor for the Council for Entrepreneurial Development’s (CED) FastTrac Tech course, a 10-week program that combines one-on-one coaching, peer learning, guest speakers and comprehensive tools to help entrepreneurs produce solid business plans and strategies. This is the latest in a series of Entrepreneurial Spirit columns for LTW from the membership of CED.
_______________________________________________________________________________________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:
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:
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:
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.
Figure Out Your Value Proposition
I bet you thought you would have one value proposition for your product. Nope. You need to tailor your message for every point along the food chain. What is exciting to your distributor may not be what excites the store you sell your product in.
With your understanding of each point along the food chain, determine what value proposition would have meaning to each of them. For example, an integrator would view having a complementary product to their existing product suite as a valuable business relationship. From the ultimate buyer’s point of view, they would see value in your offer, in the context of that suite.
A distributor wants to know how much of a discount they can get and how quickly he can move the product. So, you have to describe your value in terms of speed of acceptance of the product and support that you would provide the distributor in selling your product. Offering sales training, marketing campaigns to pull the product, and having a support line would all be perceived as having high value.
Intel and others call this “feeding the ecosystem.” You can think of the distribution channel as an ecosystem of organisms that live in mutual harmony because they complement each other with what they need to live. In the business world, it’s the creation of win-win relationships that are needed throughout your distribution channel so that they all live in complementary harmony.
Create Marketing Push and Pull
Now that you have the value propositions figured out and know how your distribution channel works, you have to put it into motion. The new product needs a launch campaign to raise the initial awareness. This calls for such things as press releases, industry consultant briefings, early customer testimonials, reference accounts, announcement events and customer road show seminars. It’s the starting gun for the race to revenue.
Simultaneously, you have to initiate marketing campaigns that create the awareness of your product to the various buyers. This can take the form of advertising, if that is the right way to reach your buyer. A website with a call to action that offers something to potential buyers could be the right approach. A telemarketing campaign to reach potential buyers introducing your new product could be the right approach. Mail or e-mail campaigns may be the way to go.
There is no one right answer, but there are usually several wrong answers. In creating your understanding of the buyer, you determined how they buy. So, you simply need to focus your marketing campaign wherever that is. If the buyer finds information about new products from trade magazines, you have to be there. If they get advice on new products from consultants, you better make their consultants real smart about your product. If they buy from selected retail stores, you will have to make the stores aware of the product.
Don’t forget the players in the food chain. They have to become aware as well. You will need to make sales calls on wholesalers, integrators, distributors and other channel partners. You will need to structure a business relationship that ensures the movement of your product through their companies. So, their awareness is of equal importance to that of the ultimate buyer. These channel partners have to have seen the product, gotten their training and have inventory on hand, as you launch the product. So, timing this work with your launch is important.
Nurture the Ecosystem
Your marketing and sales effort has to address the whole food chain and it is in your best interest to make sure that this ecosystem is really working. No, you are not Mother Nature, but not far from it. You probably don’t own any part of the distribution channel, but you do have to structure the relationships in a way that all the participants make money. The kinds of things that have to work well are:
As a business owner, you will be taking on a monumental task to make sure the whole food chain is well fed. However, as this is done well, you will reap the rewards.
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Contact Bill Warner via e-mail (thepaladin@paladinandassociates.com) or phone (919.570.1023). For more information on CED’s FastTrac Tech course, visit www.cednc.org/programs/capital_connection/fasttrac_tech/ or contact Howie Rhee via email (hrhee@cednc.org) or phone (919.549.7500 x103).
