Prioritizing the top 3 or 4 – Product Management

Assumptions, B2B, differentiation, Marketing, Marketing Ecosystem, Marketing Stamina, messaging, prioritizing, Product Management, segmentation, single target market

Last week I put up a post in which I highlighted the top issues that we need to focus on when looking at the product management in a technology environment. Product Management being a subset of marketing, some of the core items remain the same. However the focus changes a little. In my opinion, B2B technology buying needs to prioritize as follows:

Understanding the ecosystem for technology adoption
Getting footfalls (incase of a store) or hits on your website or people coming to your webinar
Cost of various media to get you the traffic
Cost of converting the footfall into a buying public

Perry Marshall calls items 2-4 as Traffic, Conversion and Economics. The reason I put the ecosystem first is because there’s a huge dependency on the existing infrastructure for the technology to be adopted. Most technology products that fail are because the ecosystem did not exist for the adoption.

Since 80/20 is fractal within each of these there’s a further 80/20 which exists. So within each database/list, there could be about 20% who would respond 80% of the times or even within the ecosystem there could be a 4% which accounts for the 64% of the ecosystem dependency.

If you are able to identify the few challenges in the ecosystem that you will face which can have a major impact on the success of your product, addressing them will ease your product launch or product entry or penetration dramatically. Its the small hinges which move doors in all areas.

Till next time then

Carpe Diem!!!

Thinking long term

B2B, competition, execution, Marketing Stamina, persistence

One of the key things to be successful is to have the stamina to play for the long term

If you can just be in the game for a long enough period of time, a lot of your competition will just fall by the way side.

The reason for that is that most people on play for the sport term and if they don’t become successful fast enough then they quit. Some others quit because they don’t have the wherewithal to last long enough.

Yesterday I was having a discussion , with my colleagues, about engaging with partners . One of the points that came out was that it takes almost a year before the partners actually start trusting you to talk about opportunities.

This is for a specific case of services where we were looking for partners. But the important point is that if we don’t have a long term plan to stay in the game we will give up this market.

When you plan your business for the long term, then you next figure out the Financials accordingly. Based on that you work on the kind of mediums you can use to do your marketing. You can decide the best possible market for you to focus such that you can play for the long term.

You will win the war if you just have the ability to fight a lot of battles. This is true for a physical war as well as in marketing.

Till next time then.

Carpe Diem!!!

Identifying the dissonance for engaging a B2B customer

B2B, Business, competition, Marketing, Marketing Stamina, messaging, persistence, segmentation, single target market

With B2B customers, as I have mentioned earlier in my earlier posts, its difficult to get instantaneous decisions because of various reasons. These could vary from inertia to customers having to do cross functional team decisions, budgets and the works.

In most cases until the dissonance with the existing supplier is so large and repeated that the customer can no longer bear it, they don’t change. However in a bundle of 1000 prospects, the Dean Jackson “inevitability principle” eventually kicks in and some incumbents falter and that’s when you get a chance to stake your claim.

Now you need to be in front of the customer to stake your claim. In addition you should, on a consistent basis keep highlighting the possible challenges the customer could be facing.

For this you need to know your competition well. Competition could be from a company or an alternative technology. You need to understand the places competition is weak and then work your messaging to highlight the challenges the customer could be facing because of the those issues. These messages need to be about “rubbing salt over their wound” so that the pain gets even more highlighted.

Its not always possible to know all the challenges until you ask the customer and then hypothesize for others – since you have already focused on a narrow segment of the market. So if you get in front of a customer on the phone or in person or via web you need to check if they value the benefits that you offer versus what the incumbent does not have. You will then realize for yourself if those benefits matter to a decent set of your audience.

Once you have done that then the the key is to be persistent because we don’t know when the customer will decide to change. Also since customers do more than 60% of their research in the sales cycle even before they call the vendors, if you are not in front of them when they are doing the research, you won’t even get considered.

Till next time then.

Carpe Diem!!!

Single Target Market – Determining the viability in B2B

B2B, Business, differentiation, Marketing, Marketing Stamina, persistence, segmentation, single target market

I have consistently been harping on the fact that you need to find a niche in the market and a market in the niche. Finding a market in the niche is the critical part in determining if the market is even worth looking at. This is not about prioritizing on the different niches. Its about discarding a niche all together. Please understand that B2B buying is generally not impulsive. Which means you need to play this game over a long term.

For priortising of niches we will have a separate discussion.

Criteria for the B2B segmentation / niche viability

Your average deal size – recurring or one time
Gross Margin
Number of addressable prospects in the niche

Lets look at bundles of 100 or 1000 addressable prospects and I will share a simple model to do a quick calculation of the viability of the market.

Lets say you have a B2B prospect base of 100 and each deal is worth $100000/- per annum recurring. Which means the whole market is worth $10m per year and over a 5 year period if you were to be able to pick up 20 clients you can get a revenue of more than $20m cumulative approx. That’s a good market to be in, because with referrals and other things put together this market may actually end up being very large. Even at a 20% gross margin in 5 years you would make about $4m.

On the other hand if your average size deal was only $1000/- per annum recurring, then the market in 5 years may not be more than $200 thousand. Even if you make 50% gross margins, you will make at the end of 5 years about $100K.

So depending on the size of your average revenue you decide if the size of the niche is viable. The same $1000 product in a niche which has 1000 prospects could be worthwhile over a 5 a year period if you were able to pick up an share of 20% of the clients.

I have found that looking at a bundle of less than 100 tends to be scary because you don’t know how many of the clients will actually move away from their incumbent vendors. From a 100 prospects, Dean Jackson’s inevitability principle will lead to around 20 prospects in 5 years coming your way because some incumbent will make errors and if you are in front of the customer on a regular basis they will end up calling you just because they see you as persistent. A lot of time people don’t have the marketing stamina to last that many years.

Try working with this model and let me know if you found this useful.

Till next time then.

Carpe Diem!!!