Businesses exist if they make money (read: profit). One of the ways they can achieve this is by launching new products periodically to differentiate and stay clear of the competition. Yet launching a successful product is easier said than done; >80% of consumer products and c.70% of enterprise technology products fail.
Given this current state of play, we are often approached by clients and product managers for a proverbial silver bullet to make their products foolproof. The tough pill to swallow is there isn’t one – the only chance your product succeeds is being clever with the tools and analysis methods available at your disposal.
At Alumni Services, we use and preach starting with the Lean Canvas Method. Originally developed by Ash Maurya using the Business Model Canvas as a basis to help deconstruct a start-up idea into its key and most risky assumptions, The Canvas constitutes of seven facets:
- Problem and Customer Segment
- Unique Value Proposition
- Cost Structure and Revenue Stream
- Key Metrics
- Unfair Advantage
All the elements from the list above are featured in some form in strategy frameworks you might be familiar with (i.e.: Porter’s 5 Forces, 4C, 4P). Still, the combination and sequential order in which the analysis is carried out makes this ‘golden thread’ approach powerful. Let’s uncover each in more detail and bring them to life:
Problem and Customer Segment
We start by identifying the users (who may or may not be the buyers) as personas and place ourselves in their shoes by drawing empathy maps and understanding the work they do every day (JBTD: Jobs to be done).
Then, we sit down with them to identify the top 3 pains and/or gains that your product will be solving for (see Gemba Walks: ‘tour of the shop floor’).
Customer segmentation involves targeting narrow but digging deep; for example, subdividing the market into discrete groups that share similar characteristics in value-base.
When we supported the launch of an enterprise Telco connectivity solution in Southeast Asia, the segment we recommended was a subset of MNCs with local decision-making, regional spending above a threshold, and who were strong domestically in a market but had fast-scaling ambitions regionally where the Telco already had an established offering and license to operate.
Unique Value Proposition
This is a culmination of who you are, what your customers want and need, and what separates you from your competitors. In our Value Proposition Canvas, we begin with the persona JBTDs, their pains/gains, and then a set of ‘pain relievers’ and ‘gain creators’ which give us a discipline or framework to flesh out the most insightful analysis before arriving at a succinct UVP.
Once we have a list of the UVPs, we will focus on translating this to a prioritized feature backlog. These are the possible solutions for each customer persona's problem that are adjacent to the company’s core competency.
An important tool we have found of great relevance here is mapping product features to the Kano model – starting with the minimum ‘Threshold’ and ‘Performance’ features and then sprinkling the gold dust of ‘Excitement’ features from the first minimum viable product (MVP) that will itself drive competitive differentiation.
We consider the paths one might use to get to the right segment of customers and the possible touchpoints (direct, indirect, online...etc.) that cater to the persona analysis done earlier. Clever discounting strategies based on the cost to serve each channel can bring further differentiation elements.
Cost Structure and Revenue Stream
To make the product launch strategy executable, different components of the organization (i.e., marketing plan, operating plan, resourcing) must coalesce and be programmed into an integrated business plan.
Financial viability is at the heart of this exercise. A product investment case works best if it is built behind an anchor customer who has expressed genuine interest in buying and can co-create and in return, be rewarded with free trials. Revenue underpinned by a named account set with gated investment milestones also works well to de-risk as much as possible upfront capital outlay.
Measure and grow are how products evaluate their progress, while metrics provide the fact-based product 'health check' to inform decisions to dial up and down investment. Over and above the basic metrics of revenue, subscriber base, and disconnect/churn, we recommend a few leading and lagging that can provide great insights on the next course of action such as:
- Days from launch to first quote and order
- # of priceable features appearing more than a threshold in any quote
- # of features never quoted
Building a killer barrier to entry is the hardest part for most products. In line with our commitment to the 'art of possible', however, a combination of factors can carve out a space for your product that will be challenging to replicate. Common areas would be high capital outlay, technology patents, regulation and/or a mix of multiple small barriers.
For example, we consulted and implemented a Telco network solution to be sold to a leading Consumer Packaged Goods company for network/managed services in difficult locations (Nigeria, Pakistan, Egypt) by forging strategic partnerships with local providers. It took time to build this capability, but it also made it tricky for other suppliers to reproduce, enabling our client to command a premium and their commoditized product (Telco data pipe) into a differentiated offering.
At Alumni Services, our consultants have the accolades and scars of many product launches.
We’ve come up with our version of what it takes for a product to tick - including using this approach to launch products internally (6 and counting!) – but also to advise clients on their future offerings. If you’re keen to learn more, let us reach out to you or give us a follow to keep up with the latest on Digital Transformation.