Tag Archives: Acceptance

How Do You Execute the Product and Market Timing Plan? Five Points

Situation: A company’s CEO is operating in a complex marketplace. Product pricing and consumer acceptance are issues. Consumer education about the product is an important part of the market plan. It may take a couple of years for the market to develop. How do you execute the product and market timing plan?

Advice from the CEOs:

  • Important issues are survival while the market develops and maintaining a unique technology advantage.
  • As a small player in a busy and rapidly evolving market, a critical element of the strategy will be to rapidly gain the attention of the people that Seth Godin has named the “sneezers” – those who have significant influence on their consumer and business peers and who can quickly help to create the momentum that will drive the company’s market position.
    • Examples: give the product to the key influencers at target companies.
    • Make it easy or free for the key influencers within your partner organizations to experience, love and spread the word about the product. Allow them to give a few free copies to friends.
  • To avoid becoming roadkill, fly under the radar.
    • Look for opportunities as they occur in this evolving market. They may come from many players.
    • Have a solid strategy in place to execute once an opportunity arises: What do you want to achieve? What is the timeline? How will you measure achievement?
    • Have multiple back-ups to the key partners that the company is currently courting.
  • Instead of looking for VC funding to fund the next round, why not secure the additional funding from the company’s original backer?
    • To earn this the company will have to demonstrate: interesting partnerships, traction in the marketplace, and assurance that an existing major player won’t squash the company.
  • A perceived barrier is that the product is not quite ready to deliver the experience that customers will expect.
    • What is “not quite ready”? Most successful products are not 100% ready on introduction. Look at Microsoft’s strategy. From their earliest products to the present, new versions are launched when they are 80-90% complete. They then respond quickly with updates based on customer feedback. Many other companies have done the same.
    • Historically, first to market has beaten later, more complete entrants.

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How Do You Build Channel Sales? Three Key Points

Situation: A company has developed a disrupting technology that allows OEM manufacturers to produce high-end machines at a fraction of their current cost. The challenge is that the company does not possess the capacity to reach producers of high-end machines.  The CEO seeks advice on how to efficiently focus channel development. How do you build channel sales?

Advice from the CEOs:

  • The dilemma is having a major disrupting technology in a market with a strong division between OEMs servicing the low/medium-end market and those servicing the high-end market.
    • This technology collapses the division between the low/medium and the high-end markets.
    • This shift disrupts the current business models of either group of OEMs, as well as their technology development plans. This is the source of resistance.
  • Therefore, the most promising channel development partner is either:
    • A low/medium-end OEM who is also a disrupter and who has the capability to develop a high-end sales and marketing effort; or
    • A high-end OEM that knows the market but who’s current strategy is failing and needs an entirely different solution to revive their prospects.
  • The near-term task is to gain market capability – both manufacturing and marketing/sales – and to use this capability to gain early market acceptance.
    • If, over the next 12 months, the company can begin to impact the market shares of the high-end OEMs, this is the surest way to gain their attention. Once the company starts to gain share, a likely outcome is that one of the high-end OEMs will buy the company to lock up their IP.
  • Another company used a similar strategy several years ago.
    • They entered a new market by way of a business collaboration with a high-visibility partner.
    • In one year, they took 30% market share from the market leader through this collaboration.
    • As a result, the market leader bought them because “it was less expensive to buy you than to spend the marketing dollars that we would have had to spend to compete against you.”

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How Do You Build Acceptance of a Disruptive Model? Two Examples

Interview with Marc Rochman, CEO, Openbucks

Situation: A company has recently introduced a disruptive business proposition. The immediate focus is pitching the solution as an attractive alternative and building early traction. What are best practices for building acceptance of a disruptive model?

Advice from Marc Rochman, CEO of Openbucks:

  • Any business, especially an innovative start-up, is bound to meet a wall of resistance; the key is finding the cracks in the wall. To do this, you must demonstrate a significant benefit to both the company and its customers. However, most important is finding a partner who has an early adopter attitude or culture.
  • Often the principal resistance is not with the product or solution being presented, but fear of being the first through the gate – particularly with a product and company who haven’t yet proven themselves. This stems from a perception that if the solution turns out badly the penalty may be severe, especially for the executive who made the decision.
  • Openbucks recently introduced a new payment solution for people who don’t have bank accounts or credit cards such as teenagers and people without strong credit and those hesitant to use credit cards online. The solution allows people to purchase a gift card from a retailer and use that gift card to buy in-store goods as well as to buy and pay for digital goods inside hundreds of online games.
  • Openbucks’ first partner is Subway. They are innovative, imaginative and not afraid to be first with a new concept. In addition, Subway also happens to have a subsidiary that specializes in payments and payment processing so they immediately understood the model.
  • Another early partner is CVS Pharmacy. To CVS the appeal was the model of convenience and a way to encourage repeat customer visits. Since people routinely visit pharmacies to get prescriptions and a host of other products, it is easy for them to buy a gift card during a routine visit.
  • The keys to overcoming objections to innovation are:
    • Be resilient and patient, especially when working with large companies. Once they begin to see a trend of success, they will more likely be ready for mass adoption.
    • Strike the right balance between persistence and a willingness to adapt your product when you see an opportunity. Pivot or tweak your model to take advantage of a new opportunity that you did not anticipate originally. The pivot allows you to take an easier path instead of banging against the wall too long. Sometimes you just have to go around the wall.
  • Subway has more stores than any other retailer in the US. Adopting the Openbucks solution came naturally for Subway because they understand payment processes and how to use them to create loyalty and foot traffic.
  • The program is simple and a win-win-win for the consumer, retail outlet, and merchants who can collect cash-like payments from the unbanked, under-banked and those who prefer not to use a credit card online. The purchase of a $10 Subway gift card can be used to buy a Subway sandwich, and inside mini digital stores in hundreds of online games. Fifty-four percent of those who buy a Subway gift card also get a sandwich – a clear value to the retailer. Further, since they have the card, they are more likely to be repeat customers.

You can contact Marc Rochman at [email protected]

Key Words: Strategy, Sales & Marketing, Disruptive, Brand, Acceptance, Resistance, Retail, Benefit, Fear, Gift Card, Payment, Credit, Subway, CVS, Convenience, Objections, Pivot

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