Midcourse Corrections Often Needed in Fast Growing Companies* (Marketing Memo, April, 2009)
A client asked Winett Associates to evaluate the prospects for a product they wanted to reintroduce to the market. To advise the client how to reintroduce the product, we talked with customers, prospects, distributors, and competitors, and analyzed our findings. We focused on the project, and our client focused on revenue-generating activities.
Over 93% of "successful innovation" follows false starts, claims Clayton Christensen of the Harvard Business School in "How Hard Times Can Drive Innovation," The Wall Street Journal, December 15, 2008. By the time a company has progressed from development to growth mode, its marketing program-if it has one-is often based on out-moded assumptions. Consequently, high growth companies should conduct a midcourse marketing assessment. Among the things to review are your customers' needs, practices and purchase preferences; the competitive landscape; your product descriptions; and your marketing and web strategies.
Have customers' needs and practices changed? While you were perfecting your technology, developing products, and building a customer base, customers' needs may have changed. Your company may lose customers because your products are now for the wrong computer platform. You may need to pursue a different market segment or modify your offering. However, it is better to discover these changes through market research than through a failed marketing campaign. You cannot push a product on a market segment that does not want or need the product.
Do customers prefer to purchase products online or in other new ways? Some customers still prefer to license software for use on their own equipment. Others prefer an on-demand or software as a service model in which customers purchase software subscriptions. The software may run on the vendor's servers or on the purchaser's servers. By talking to customers, you can ascertain their current purchase preferences.
Has the competitive landscape changed? As part of your midcourse correction, identify all new competitors. Find out what their products do, and develop a suitable response. Some companies over-estimate their own market opportunity because they have not factored in competitors when making market forecasts, observes Linda Bentley, president of Business Visions, Inc.
Are your product descriptions clear and up-to-date? You cannot sell a product that no one understands. Some product descriptions are so convoluted that not even industry veterans can understand what the technology product does and how it works. Describe the product in terms of benefits or problems solved. Include just as much detail as is necessary, and organize the details logically. Define acronyms and technical terms, and avoid jargon and marketing fluff. On your web site you can provide an optional link to more technical information.
Do you have the marketing capability required in a growth environment? Fast growing companies need the resources to build a separate marketing department led by a marketing vice president or director. This person should be responsible for developing and implementing a marketing strategy that evolves as the company grows. Knowledge of the company's technology is essential, but the chief marketing officer must also have broad marketing experience and understand the value of market intelligence. This means obtaining customer and industry data before proposing changes in marketing strategy.
Is your old web site appropriate for a fast growing technology company? The message and look and feel of your web site should be professional, and it should be consistent with the look and feel of other marketing material. If you use blogs, social media initiatives, or search engine optimization (SEO), make sure that these initiatives are part of your overall marketing strategy. This may mean allocating additional resources. An unattended blog is worse than no blog at all.
High growth technology companies are engaged in a game where the rules change constantly. Therefore, these companies must be able to identify changes in their market and their customer base. Then, they must adapt to these changes. Finding that it was difficult to sell its imaging devices to healthcare organizations, a company adapted its products and marketing campaign for use in the defense industry. However, before making drastic mid-course changes, companies should conduct an exhaustive study of the alternatives.
*This article originally appeared in Mass High Tech.
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