How to Get Out of the Office and Talk to the Market
We have often been engaged to help companies bring tech products to market. Many of our clients are either professional services firms that have developed products and don’t understand the process to bring products to market effectively or new product firms that realize early on there’s more to launching a product than just building it. We help them understand the 30 or so things that must be done well to be successful.
One way we ensure that we’re staying up on trends in product marketing is by following Pragmatic Marketing. We’ve attended their seminars in the past and use their framework as the basis for a lot of the work we do with our clients. We make good utilization of their content.
They just published a new white paper called “A Practical Approach to Products: How to Build and Market Products that Sell.” The main focus of the white paper is that the marketers behind the products your company is bringing to market are listening to the wrong people. You should be listening and talking to the market as compared to internal groups. True, sales people talk to prospects, and customer support talks to existing customers, but if you’re only listening to the internal groups, you’re not going to get a full picture of what the market really needs. The white paper cites Wharton’s George Day who says, “Market-driven organizations are 31% more profitable than those driven by other factors.”
Pragmatic says that the Four P’s of Marketing we learned about in college still exist but that the most important P of all should be “problem,” as in what Problem we are solving. Market problems should be the first and most important consideration for any business. I’ve often preached to marketers that you need to be in the market, not the office to understand the true pains your customers are experiencing. Pragmatic talks about NIHITO (Nothing Important Happens in the Office). That’s often true. Great things can happen when you’re out in the market.
We had a similar example a few years ago with a company that wanted to bring a paper shredding business to market. The company had a successful paper processing business and was looking for ways to expand on its periphery. We did a lot of research on the competition and determined that there seemed to be a market opportunity. Commercial shredding was relatively new. Iron Mountain and Shred-It were the big companies in the game but they did not service many areas 20 minutes outside of major metropolitan areas.
When my client expressed interest in pursuing this market opportunity, we went out and interviewed 30 companies in the region about their paper recycling and shredding requirements. The information we received was not boding well for their long term success. Many people we spoke with said they did not have a large enough amount of paper to require utilizing a shredding service. One prospect even said that shredding was half a notch above trash collection. After speaking to the market and doing the math, it was clear that this was not going to be a long term profitable opportunity. Plus, the market also said that it was going to be a hard trail to find enough transactional clients to support the business.
We used this information to reduce the investment in the business saving the client hundreds of thousands of dollars.