8 Steps to Building a Customer-Focused Commercialization Strategy

8 Steps to a Commercialization StrategyBefore a commercialization plan can be developed and implemented, it must be driven by an overall commercialization strategy. By taking a strategic approach to your commercialization strategy, you will be better positioned to be successful with your new product launch.

The commercialization strategy should not contain a lot of financial detail or “how to,” but it must be consumer focused and customer centered and not technology focused. A key issue in a commercialization strategy is to set the direction to explore and understand the market. The commercialization strategy must focus on what satisfies the needs of the customer.

8 questions you need to answer in your commercialization strategy

1. What’s the Offering? (What are we trying to provide or create?)

Commercialization Strategy TipsAt a high level, clearly state what products and services are being offered to the market.

Identify what other products/services may need to be provided to be a credible supplier to the customer and the channel. Identify, at a high level the anticipated pricing strategy at the end-user level and for the expected distribution channels.

2. What is the Adjacency Assessment of the product or service? (How does the product or service align with the core business areas?)

Chris Zook in, Beyond the Core, addresses the concept of Adjacency or the relationship of an opportunity to your core business and competencies. Zook defines several things when looking at an opportunity:

1)    Core – Known business strengths and competencies

2)    Adjacency – Relationship to the Core ranked from 0 (identical to the core) to Diversification (a completely new area).

 3)    Shared Economics – There are five dimensions that when evaluated and measure the distance from the core and can be used to determine the degree of relationship to the core:

  • Customers – Are they the same as, or different from, customers currently served?
  • Competitors – Are they the same as, or different from, competitors currently encountered?
  • Cost Structure – Is the cost structure (infrastructure) the same or different?
  • Channels of distribution –Are these the same or different?
  • Singular capability/technology – If there is a singular capability (brand, asset, technology) that gives the core business its uniqueness, then is this relevant in the new opportunity?

3. Who is (are) the Targeted Customer(s)? (Who do we really think will want the product/service and Why?)

Identify who is (are) the targeted customer(s) – end-user, big box retailer, distributor, internal business unit, etc. Who are we trying to sell this product or service? Keep in mind that the targeted customer(s) may change as more marketing and Voice of the Customer data is collected.

Why is this customer believed to be the real customer? It is toward this customer that the Business Proposition will be initially oriented. It is toward this customer that the Business Plan will be structured.

4. State the “Business Proposition”

Strategy and Marketing traffic sign in the handThe business proposition describes what the product or service offers that no other product can.

It is important that the Business Proposition be benefit focused. For example, Coke quenches thirst. Coke is also a good rust remover but it will NEVER advertised as such.

The Business Proposition should take caution not to over advertise advantages – in other words, DON’T clutter the message. The more focused the message, the more likely to clearly communicate it.

Have a single Value Proposition – Keep It Simple – the KISS principle.

When developing a business proposition think of what people are buying.

Customers are not buying a product – they are buying what that product does for them. Customers don’t typically buy a product because they fall in love with the technology. Customers buy the SATISFACTION OF NEEDS. The Business Proposition MUST clearly state how that need will be satisfied.

Doug Hall, in his book, Jump Start Your Business Brain, addresses three key elements to Stating Value:

1) Overt Benefit to the Customer – What is the real benefit to be realized? Engineers love to talk specifications – “This car will go from zero to 60 in 3.2 seconds.” Buyers want to feel the wind in their hair and the thrill of feeling the force of their heads being pushed against the back of the seat.

2) Dynamic Difference – What makes our product/service any different that what is now available? Unless this product is for a total new and untapped market, customers have choices.

3) Real Reason to Believe – What gives the customer confidence that we can deliver the product or service we are offering? For example, “We have had Z years of 100% customer satisfaction as measured by JD Powers.”

5. State the “VALUE CHAIN”

Sales leadership stepsThe Value Chain relates to the business processes of the company selling the product.

Questions to be answered are:

  • Who will sell the product? Whoever has sales responsibility must be aligned with the Value Proposition – they must care that the product/service really does meet the customer’s real need.
  • Where will the product be sold? This may need to be clarified in later, but initially, choose the logical area(s) that fits in with your Value Proposition.
  • How do you distribute your product? What is (are) the expected distribution channel(s)?

The Value Chain and Business Processes must be aligned as close as possible to the Value Proposition. The closer the alignment, the greater the probability of success.

6. How will the product/service be Marketed?

Brand idea chartAt a high level, what is the basic marketing approach? Consider the following:

  • Who will provide the marketing activities?
  • Who internally will oversee that the marketing activities are done correctly?
  • Identify logical points to test assumptions, validate alignment with the Value Chain and/or Business Proposition, and logical changes/adjustments to the marketing approach, the Value Chain, or the Business Proposition.
  • What is the overall Communication Strategy for getting the message out to potential customers?

7. Provide a rough-order-of-magnitude Business Plan

Given the information available, give a high-level assessment of the business potential for the three years after commercial launch. Try to be realistic, meaning not overly optimistic nor overly conservative.

Items to consider are:

  • Sales
  • Gross Margin and Gross Margin as a percent of Sales
  • Operating Income and Operating Income as a percent of Sales
  • CAPEX
  • RONA

8. Major Commercialization Risks/Issues/Obstacles/Support Requirements?

What significant commercialization items can keep this effort from being successful? What support is needed from management, gatekeepers, resource managers, etc.

Write out what the risks are and rate them High, Medium or Low. Put a few ideas down on how you can mitigate these risk.

Don’t use a Ready, Fire, Aim commercialization strategy

readyfireaimTo maximize your chances for success, you need to be thoughtful in developing the strategies behind your new products.

Innovation can happen in the commercialization of a product as easily as in the product itself.

Think about all the ways you can build upon and leverage your commercialization strategy and you might find your sales teams more engaged in the product launch, your customers understanding what’s in it for them, and ultimately your new product goals being achieved.

Good Selling!

A special thanks to Lowell Dye for his help in better understanding the product development process and in writing this post.

Active Search Results (ASR) is an independent Internet Search Engine using a proprietary page ranking technology with Millions of popular Web sites indexed.

10 Product Marketing Blogs You Need to Read

10 Product Marketing Blogs You Need to ReadFind insight and benefit from the thought-provoking blogs of these product marketing experts.  Each tackles the problems and issues that we all face as product marketers from their unique perspectives.  My top 10 list, in no particular order, includes:

  1. Shardul Mehta – Street Smart Product Manager
  2. Jeff Lash – How To Be A Good Product Manager
  3. Marlon Davis – Connecting.Some.Dots
  4. Ben Rees – Focus Product Marketing
  5. Cindy Alvarez – The Experience is the Product
  6. Stewart Rogers – Strategic Product Manager
  7. Chris Cummings – Product Management Meets Pop Culture
  8. Nils Davis – Wait, I Know This One
  9. Teresa Torres – Product Talk
  10. Rob Berman – Rob Berman’s Blog

There is a brief profile on each blog along with a link to their site.  In addition to a screen shot of the site, I’ve provided few words usually edited right from their own About section.  In most cases, I’ve also included their Twitter address.

A note on why these 10 blogs.  I tried to focus on blogs that were written by individuals and not blogs from groups or companies.  There are some great blogs that fall into this latter category, including:

Shardul Mehta…Street Smart Product Manager − The down-to-earth realities of what it takes to be a product ninja every day

Street Smart Product ManagerShardul Mehta is a simple product guy whose passion for great products is only exceeded by his love for chicken curry.

Here’s what you can expect to find on his blog:

  1. Tangible, actionable advice that you can execute on immediately. This is based on things I’ve seen work and not work. Writing about this actually sounds easier than it is.
  2. Thought provokers. Posts that push the envelope in thinking about how to conceive, validate, build and launch products. Hopefully, they will elicit discussion, debate, which can only help strengthen our field.

Find him on Twitter at @shardulmehta

Jeff Lash…How To Be A Good Product Manager

How to be a Good Product ManagerThis is a blog that provides resources and tips on good product management practices. While it focuses more on managing technical and online products, most of the concepts are appropriate for broader product management purposes.

In most cases, Jeff came up with ideas for the postings based on a “good” product management experience, and then I tried to think of the exact opposite approach that would be a “bad” thing to do. Other times they are based on examples, case studies, or others’ experiences. “Bad” examples should not be interpreted to be based on product managers I have worked with in the past or with whom I am currently working. (Hopefully, though, they are not representative of product managers I will work with in the future!)

Find him on Twitter at @jefflash.

Marlon Davis…Connecting.Some.Dots

Connecting Some DotsA blog on Product Management and Marketing Experiences, Connecting.Some.Dots was created to share Marlon’s experiences with other product managers who are working with technology and its application in order to introduce new and innovative products into the market and to sustain their success.

Visit Marlon’s LinkedIn profile to comment on his blog posts.

Ben Rees…Focus Product Marketing – A blog about product marketing, mostly for software companies

Focus Product MarketingBen Rees comes from a Product Management background but then moved over to the dark side of Product Marketing – which is the subject of this blog.

Find him on Twitter at @benjrees.

Cindy Alvarez…The Experience is the Product

The Experience is the ProductCindy Alvarez is a product manager who turns understanding the customer into competitive advantage.

Her philosophy is it’s all about the experience. She’s excited by companies who “get it” – that consumers don’t separate user experience from features and benefits of a product when they decide whether or not to use and recommend it.

But “the experience” isn’t just about consumers – it’s a dedication to ongoing improvement in how you work together and communicate and empower your teams. Everyone has to know where we’re going in order to get there.

That requires effective communication and a shared vision across multiple teams who often don’t “speak the same language”. She evangelize a product experience-driven development process.

Find her on Twitter at @cindyalvarez.

Stewart Rogers…Strategic Product Manager

Strategic Product ManagerStewart is a promoter, evangelist and recognized thought leader of product management best practices. He is an experienced product management professional with over 10 years in online and technology product management.

Find him on Twitter @stewartrogers.

Chris Cummings…Product Management Meets Pop Culture

Product Management Meets Pop CultureProduct Management Meets Pop Culture is Chris’ attempt to give something back to the community that helped shape him as a product management professional.  Why the pop culture?

Because most people “get” pop culture, and most people don’t really understand the role of “Product Manager” … but a good PM can mean the difference between a product achieving its goals or missing the mark.

Chris developed this site — using movies, comics, and other pop culture ephemera — to illustrate product management ideas that anyone can start using immediately, and to encourage discussion of best practices that we can all benefit from.

Follow him on Twitter @chriscummings01.

Nils Davis…Wait, I Know This One

Wait, I Know This OneOn his blog Nils hopes to share some insights and experience he’s gained over 20 years of practicing and studying software product management. He has both a less sanguine view of product management plus a more extravagant view of its meaning. He’s most interested in the specific challenges that arise because product management is a complex domain and discipline.

Product management is not like other disciplines – management, sales, marketing, development, etc. And he doesn’t put much store in techniques that are meant to address those merely complicated domains (e.g., project management), because they don’t work well in the face of the complexity of product management. In short, he doesn’t think a machine is going to take over our job any time soon! In the product management world we constantly struggle to understand how products are successful, and why some are not successful despite the best efforts of our colleagues, while others succeed despite “doing everything wrong.”

You can also follow him on Twitter @nilsie.

Teresa Torres…Product Talk

Product TalkTeresa is a product consultant and coach who works with early-stage companies helping them translate their big ideas into great products. Her focus is on helping product managers be better at what they do by sharing knowledge, building know-how, and refining practice. You can read more about the goal of her blog in her first post, Turning Big Ideas Into Great Products.

You can follow her in Twitter @ttorres

Rob Berman…Rob Berman’s Blog − Propelling Marketing Ideas

Rob Berman's BlogRob helps companies grow their revenue and profits.  He created this blog to share his experiences and to engage in conversation.  In particular, he leverages his experiences as a marketer, product developer and product manager who consistently brings new products to market, manages existing lines of business, drives communications and achieves financial targets.

Follow him on Twitter at @rcberman.

What Drives Your Product Marketing?

What drives your product marketing?Is your team goal setting a once a year exercise?  Do you build and deploy metrics that sounded good in January and then struggle to rate against them a year later?

If so, that could be keeping you from winning.  And nowhere is that more true than with your product marketing team.

Product marketing is both strategic and tactical

Few roles in a company are both strategic and tactical.  Product marketing is both.  That said, you need to have a strategic view of product marketing…and not a vague dollar goal of new product sales in three years.  Or even a specific sounding goal like a 35% product vitality rate.

Here’s why, the marketing strategy for your company needs to flow directly from the strategic plan.  The entire planning process should be:

  • Strategic plan
  • Marketing plan
  • Product plan (as well as a brand and channel plan all working in sync)
  • Annual operating plan (AOP)

At each step of the way, the goals of the company and reinforced and cascaded into functional and then individual goals.  There is then a clear line of sight from the strat plan all the way down to the team members.

Create a product marketing mission for clarity and purpose

For the best results with your team, try creating a product marketing Mission.  Here’s a starting point:

  • Create vision and provide leadership for the strategic direction of the portfolio of products driving growth and profit.
  • Intimately understand the users’ needs and deliver innovative solutions that give competitive advantage.

Whatever you create, print it out and have the entire team sign it.  Make it a team building exercise and a stake in the ground for where product marketing is going inside of the company.

Product marketing is focused on transforming insights into action

Where to play how to win1Having a strategy to guide and focus your efforts is key but you need to prioritize and focus your efforts to maximizing your successes.  Each of these components can be the basis for a meaning measure that can be tracked throughout the year.

The critical components you need to have to be able to deliver your product marketing mission are:

  1. Consumer insights
  2. Clear strategy on “Where to play” and “How to win”
  3. Deep understanding of the competition
  4. 3 year product road
  5. Effective New Product Development processes
  6. Customer engagement strategy to commercialize your new products and gain pre-launch customer feedback and acceptance

Consumers use but shoppers choose

imagesCA0MWGJTConsumer insights are especially valuable because that’s where you have the greatest opportunity to uncover an unmet need.  But insights can come from almost anywhere.  That’s why you need to cast a broad net and study not just product users, but shoppers for your own products as well as the competition.

Your research shouldn’t be a validation of your ideas but dig for insights on what could be better.  Does the competition do something that users really like?  Is the packaging doing clearly communicating?  And, of course, gain customer feedback throughout the entire process.  Research is new news and a critical part of consultative selling.

While “Design for the user.  Sell to the shopper.” is a cute phrase, this statement clearly communicates to both senior leaders and cross functional teams what you are trying to do with your research work and makes it clear that product innovation is only the starting point.  Commercialization is the other critical component of new product success.

Knowing “Where to Play” is critical to answering “How to Win”

Where to play how to winInsights are important but having a clear product strategy is critical to being able to focus and prioritize.  Your choices are:

  • Protect current business
  • Expand distribution
  • Innovate new solutions
  • Build capacity through mergers, acquisitions & partnerships

The end result will allow your team to be able to tell everyone from the CEO to the sales team why a new product make sense and why we think it will be successful in the market.  Ultimately, you need to prove that your new product is:

  • Better than your current products
  • Better than the competition
  • Better for your customers
  • Better for your company

Set targets.  Keep score.  WIN!

The bottom line is with clear, deployed product marketing goals you will be able to:

  • Set Targets
  • Keep Score
  • Win!

For other Channel Instincts posts on product marketing, see Are You a Product Marketing Hero? or Are You a Marketer Or Just a Product Expert?