Tag: product strategy

Product Development Strategy: A Complete Guide to Create Better Products

Posted on by Emily Louise Spencer

When creating a product, you can’t just spitball it. You need to take the time to create something that customers will actually want, and that is a better option than what they currently purchase. A product development strategy will assist you in finding your ideal product-market fit, and winning over customers from competing brands by providing a superior option.

What is a product development strategy?

You might have heard of the terms “new product development” or “new product development process” – while these are definitely important when creating a new product, they aren’t precisely what we’re talking about today.

A product development strategy is the direction that a new product release takes, from its market position to its overall demographic targeting process. 

It’s a catch-all term that includes everything that takes place between having an idea for a product and actually putting it on the market.

The key takeaway here is that while new product development has to do with the actual act of creating a product, the product development strategy covers this and the steps needed to turn it into a viable, marketable product.

TCGen, which specializes in product development, has created a brilliant checklist that summarizes what a product development strategy is useful for, so take a look below.

product development strategy flowchart

So you might be thinking, if I’ve already implemented the new product development process, why do I need a product development strategy? After all, couldn’t I just take the end result and apply the same principles?

Well, you could. However, no business exists in a vacuum.

The fact of the matter is that some products aren’t just made for the sake of making good products that make money. They have another purpose. To gain a competitive advantage within the market, keep the company relevant, and claim a foothold that wouldn’t be available later.

It’s no coincidence that a new Xbox launches around the same time a new PlayStation does. Both companies can’t afford to concede market share to each other (Unless you’re Nintendo, and then you can do whatever you want). 

Alternatively, businesses can patent & sell products simply so the competition can’t. Both Xbox and PlayStation have a long history of exclusive games, many of which were made by 3rd party companies.

The lesson here?

In the world of business, it isn’t enough to have a good product. You can still be undercut, out-advertised, and out-sold by another product if you don’t play it right.

That is to say, if you don’t have a good product development strategy.

What benefits can a product development strategy bring?

Okay, this sounds great in theory, but how do I apply it to my products? Fair question.

We touched briefly on why a product development strategy is important in the last section, but now it’s time to talk about tangible benefits.

So, what are some benefits of having a product development strategy?

Keeping an eye on the big picture from the start

When you have a product development strategy, you know exactly what it is you’re trying to achieve.

That might sound like common sense but bear with me here.

Let’s say you’re making a line of clothing, and your big-picture aim is to introduce hypo-allergenic fabrics that you can market to customers with sensitive skin.

Now, if you simply tell your design team that you want a certain set of clothing, e.g., pants, shirts, etc., from pure cotton, all they know is the letter of the instructions, not the spirit. 

Nevertheless, they get on with it and have a working set of prototypes produced.

So the day comes for them to produce their designs, and lo-and-behold, they’ve used a dye that renders the line completely unusable by people with sensitive skin.

So what now? Well, they’ve got to go back to the drawing board with more precise instructions.

When you have an overarching aim, you need to keep all of your teams informed so they can create products that fit the spirit of your aims, not just the letter. 

A product development strategy does exactly this, aiming to focus on the product’s placement and market position every step of the way.

Aligning cross-functional teams

When you run a business that creates products, it’s expected that you’ll have more than one team working on different steps of the process.

Those involved in product creation aren’t necessarily the ones who will be manufacturing it, and vice-versa. Thus, when creating a new product with a specific aim, you need to be keeping everyone on the same page if you want things to run smoothly.

Easier said than done.

Sometimes there are factors that one team is aware of, but the other is not, making the entire process grind to a halt when a plan is produced that simply doesn’t work under current limitations.

For simplicity’s sake, let’s take the example of the clothing manufacturer above again.

Your design team has managed to avoid the issue with dyes and has created a sensible prototype. And so, they decide to pass it on to the manufacturing team to produce.

However, you run into yet another roadblock.

You see, the supplier of the dye that you’ve selected has had some bad press, and the dye itself isn’t considered that reliable by those who find hypoallergenic clothes a necessity.

Now, anyone on the marketing team could have told you this. It’s their job to know the ins and outs of the current market, and they could have saved you from having to loop back again if only you’d communicated.

Product development strategies include communication aspects like these, using the big-picture focus to bring in new information when it’s needed.

Kellogg’s championed their traditional cereals such as Cornflakes, Froot Loops, and Frosties for decades, but with times changing and consumer preferences shifting, they’ve widened their reach by acquiring more diverse options to keep their customers happy.

Feedback & guidance loops

Both of the above are examples of a business that’s missing feedback & guidance loops.

Feedback & guidance loops are lines of communication in which advice is passed on from further down the chain back to the product design team. By keeping themselves in the loop, delays and design errors can be avoided, and the process runs more smoothly overall.

Of course, these loops aren’t limited to being relevant to the design team. 

All teams involved can benefit from them to some extent, even if the most obvious examples involve product design.

The big-picture approach requires, well, keeping the big picture in mind at all times. 

And if factors change in one area, it’s going to have a knock-on effect that might alter your overall approach.

Efficiency

Lastly, let’s talk about efficiency.

The ultimate goal of business is to bring in revenue & make profits.

Now, this obviously means that you need a decent amount of sales, but there’s another side to it too. Costs.

You can have the most incredible products ever created, but if the costs of design are too high, then you’ll spend years in the red before ever being profitable.

That’s not to say that you can’t plan to be in the red, but it needs to be done carefully. Plenty of businesses thought that they were in the clear, only to be blindsided by the COVID-19 crisis in 2020.

What I’m trying to say is that the future is uncertain, and you need to be able to bounce back. Sinking into the red with a lengthy, inefficient product development process is precisely the opposite of that.

See, a lot of the time, your manufacturing costs can’t really be altered without affecting the quality of your products.

Your costs of sale, packaging, delivery, advertisement, and the like are often relatively static, especially if you use a third-party platform like Amazon or Etsy to sell.

So, when those two types of cost are static, and you need to lower your numbers, what do you do? 

You improve your product development strategy, improve your efficiency, and decrease the amount of time & money it takes to develop a new product.

Every factor we’ve talked about thus far has been leading up to the ultimate goal of product development strategies; to make the process smoother and less costly to go through.

The 3 types of product development strategy

Rewinding back, let’s look at what a product development strategy is again before jumping right into the types you can have. 

Product development strategies are all about aiming for sales. They’re all about trying to create & develop your new products in such a way that they’ll not only be great, but marketable.

You can have the greatest volcano-proof diving suit ever made, for example, but if no one will buy it, then from a business perspective, it’s a dud.

With that in mind, the types of product development strategies you can have are largely dependent on your marketing tactics. 

Let’s take a look at the three most common types.

PDS type 1: Premium

When I think of premium, my mind jumps to brands like Louis Vuitton and Porsche.

What do these brands all have in common? Well, they’re high-end brands that market their products as luxuries, as things to aim to achieve. 

They’re brands that enjoy high brand equity, with their products making people go “wow.”

These brands aim to be right at the top of the market, selling small numbers of products but at high prices. That way, they make a lot of profit per unit and increase their revenue overall.

There are downsides, though.

For one, costs are higher than average. This is expected, as you use “limited-edition” or “high-quality” materials in your products to make them more desirable.

Often, these materials are entirely superfluous to the nominal function of the product, such as diamond-encrusted handbags, but you could say that their purpose is to show off.

Remember, these are luxury products. Most drivers wouldn’t need a car that goes 250 mph and wouldn’t think about it when deciding to buy one. They’d just think about what can get them from A to B.

Someone looking for a luxury car, on the other hand, probably has the time and money spare to take it to a race track or onto a highway where such speeds are allowed, thus making such a feature relevant.

Further, luxury brands are very difficult to establish. 

Unless you’re entering an entirely new market where almost all products were created recently, akin to Apple when establishing themselves in the PC industry, there are probably going to be big-name brands there already that won’t like you muscling in on their territory.

Keep in mind that often these brands have a long and proud history. 

Many European and Asian brands date back centuries and take their longevity as a badge of honor. It’s taken as a standard of quality that they’ve been able to operate for so long and still stay in business.

The Genda Shigyō company that provides traditional Japanese gift wrapping has been running since 771! Just imagine trying to go up against that kind of established name!

There’s also the factor of a diminished customer base. It’s a fact that most Americans can’t afford luxury goods.

Fewer potential customers mean that every sale matters. Every sale lost matters even more. It’s vital to keep your quality high and your customers satisfied if you want to keep operating with this type of strategy.

PDS type 2: Budget

Entirely on the other end of the scale, we have the budget strategies.

These types of strategies follow the idiom “quantity over quality” to the extreme. In essence, by making very small amounts of profit on each sale but making lots of sales, you increase your profits.

And a low-cost product is far more likely to be bought by those who make choices on the basis of price alone, meaning a bigger reach for it.

Budget products are often thought of as low-quality, but this isn’t always the case. In this type of product development strategy especially, you keep your profit margins low to keep prices down rather than using cheap materials.

Remember, being a budget option does not mean you are cheap. It means you’re comparatively cheap when you consider the market as a whole.

A great example of this dichotomy is the smartphone industry. The cheapest new model will still set you back at least $50-100, not exactly budget.

Of course, if you do use cheap materials, you can lower your prices further and present yourself as a truly budget option, but that’s at the extreme end of the scale. The vast majority of products are not created to be cheap alternatives since consumers expect some measure of quality.

A phone that can barely load WhatsApp would probably sell poorly, after all.

There are some cons to this strategy.

You can quickly stray from low profit to no profit if your circumstances change. The difficulty with positioning yourself in this area comes with constantly having to monitor your operating costs, as even the tiniest increase will be a blow to your profits.

There’s also the factor of coming across as too cheap. 

Generally, consumers are suspicious of products that are cheaper than others, even if reviews say that quality is consistent. It’s expected that certain types of products cost certain amounts, and any strategy that prices under this can be dismissed as being tacky.

Overall, this type of product development strategy is tricky to do but can perform wonderfully.

PDS type 3: Competitive

We’ve talked about the two extreme strategy types, but those are what they say on the tin, extremes. The vast majority of product development strategies fall somewhere in between, even if they do lean one way or the other.

Right in the middle of budget & luxury goods, you have competitive goods. These are products that have moderate profit margins and aim to sell a moderate amount of units. 

How do you define moderate? A moderate price is determined by the average prices of that particular market as a whole. In other words, you price your product so it might be considered by the average consumer, keeping the quality consistent with what they’d expect for that price.

Let’s look at an example to make it clearer what this means.

When you think of high-end coffee, you might think of imported Jamaica Blue Mountain. On the other hand, if you want a low-budget option, you might settle for Dunkin’ Donuts’ own brand.

In the middle of these options sits Starbucks. Not too pricey and not low-quality. A good, reliable coffee shop that serves millions daily.

Starbucks occupies the competitive slot in this case, with their coffee being of a good enough quality to be called pleasant while keeping their prices low enough that they’re not a luxury brand.

Starbucks exemplifies the reason why most products are planned out to follow this route. You have the possibility of reaching almost all consumers, whether as a cheaper alternative to their luxury goods or as an upgrade from their usual once-in-a-while. 

Your pricing strategy means that you make a decent amount of profit on each sale and aren’t that vulnerable to fluctuations in material costs or consumer tastes changing.

So what’s the catch? Why would anyone choose a different strategy than this, you might be asking?

Well, that’s precisely the reason. If everyone is aiming for this place in the market, then you’re simply one of a dozen. 

Think of the last time you bought lightbulbs. Did you choose a specific brand, or did you just grab the first pack you saw on the shelf with a decent enough rating? Probably the latter.

When the market is saturated, you’re going to have a hard time establishing yourself as anything more than a face in the crowd. The reasons that brands want to choose this strategy are, paradoxically, the reasons that they can’t.

Not every coffee drinker goes to Starbucks, just as not everyone buys the same brand of shower gel. People buy what they’re used to, and unless you’re entering a market with something new and exciting, you’re simply going to fade away into the background.

Internal and external product development strategies – what’s the difference?

Now that we’ve talked about the different types of product development strategies, it’s time to take a brief note of… different types of product development strategies. ????

Hold on, this isn’t just a rehash of what we just spoke about, but something different entirely.

When you’re creating a new product, there are two different ways you can go about it. First off, you can utilize resources that you already possess, or you can look for possibilities that exist outside of these.

That’s what we call an internal vs. an external product development strategy.

Internal product development strategies

Internal product development typically refers to creating new products out of existing ones. That might be a personalized variant, a new and improved version of your product, or simply taking the ideas that exist within a product and applying them in new ways.

If you’re a smaller business or a start-up, you may find it hard to employ internal product development strategies since it’s possible you’ll lack the necessary resources. Look to the next section for how you might go about strategizing.

A common way for software companies to develop using internal product development is by acquiring smaller companies that produce complementary software, then combining them into a single package. This way, they can utilize their existing resources, which is far cheaper than creating new ones, and sell again as a new product.

Internal product development has several advantages, notably that you’ll already be established and can use the marketing from previous products to your advantage.

When Apple releases a new iPhone variant, for example, it’s always with the caption “the new iPhone” or “the upgraded iPhone” to allow consumers to subconsciously associate them with the success of previous versions.

Overall internal product development strategies are cheaper, easier to implement, and run far more smoothly on average since you probably know what you’re doing in this area.

On the flip side, there’s only so much you can do with an internal strategy since you’re limited by what you already possess. If you want to really innovate, you need to create an external product development strategy.

External product development strategies

External product development strategies are about creating something new. Something that your organization has never delved into before. This can be entering a new market, expanding into another country, etc. 

External product development is a double-edged sword, however. 

There are great rewards to be had with creating truly new, innovative products. Technological progress comes from external development, with giants like Thomas Edison & Nikola Tesla daring to be creative and develop something new.

However, this also comes at increased costs. After all, acquiring new assets takes funds, time, and effort, none of which are free.

When you create a new product using an external strategy, you could end up revolutionizing the future of electricity by patenting multiple electronic devices like Edison. 

On the other hand, you could run out of money trying to build Wardenclyffe Tower like Tesla. The tower stood as a monument to human progress. However, it came at an extreme cost that couldn’t be recouped.

After all, it’s not enough in the world of business to simply innovate, you need to do it in a way that makes money and keeps your investors happy.

4 stages to creating a product development strategy

If you’ve read this far, you probably want to know how to go about creating a product development strategy. 

To create one, you just need to follow the steps below. That’s it.

Go. ????

Stage #1: Defining your vision

First, you need to define your vision. This harkens back to our earlier discussion on the types of product development strategies you can use.

There are two questions that you can ask yourself when deciding what type of strategy is best.

  • Do you want to be a budget option, a luxury option, or a middle-of-the-road?
  • Do you intend to create something entirely new or to derive from existing assets?

To answer these, you need to have an idea of what you want to develop already in mind. Without this starting point, the entire plan falls apart.

Luckily, you can start with even the most ridiculous ideas. At this point, you’re not putting any material costs into the process, just time.

If you think your idea is too ridiculous, remember that someone once put their hand up in a board meeting and suggested a movie featuring “a tornado made of water with sharks in it.”

And it got sequels too!

Once you have your idea, you can start applying the potential options to it and seeing if they work. 

Sometimes, you simply won’t be able to think of a place to market an idea, and that’s okay! Just file it away and move on to the next one until you find a concept you’re certain can fit one of these options.

Stage #2: Developing a strategic plan

Once you have your concept, it’s time to lay out a plan for how to create it.

The process of product creation can be as straightforward as designing a 3D file to send to a machine or as complex as mapping out a piece of software. Either way, it’s important to plan how you’re going to create it.

The strategic plan isn’t a step-by-step for how to produce your product. That comes later. Essentially, this is the process by which you link vision and reality, taking your concept and applying the first touch of real-world principles until you have a rough guide for how to begin.

The key idea here is to touch upon the real-world factors you’d need to consider, laying them out for future reference. It’s all about large strategic steps that might seem vague but are definitely necessary.

Remember, strategic plans aren’t the final word. They’re rough guides for how you want to go about your operations, with the actual details up in the air until they’re finalized. After all, you can’t predict how supply chains might look two years from now, so why finalize it right away?

Stage #3: Building a roadmap

Remember how we mentioned the step-by-step guide? This is it.

A product roadmap takes the broad steps of the strategy and breaks them down into recognizable, realizable steps. These are often built up over time and can be highly technical. 

A roadmap is essentially a guide for how you will be bringing your product concept into being. It connects budgeting, assets, decisions that you need to make, and more. 

When creating a roadmap, it greatly helps to keep things modular.

You might be thinking, what? Haven’t we just been talking about how important it is to keep everything running together? 

So, when I say modular planning, I mean keeping every aspect of your roadmap separate yet connected. 

Essentially, for each step of the journey, you need to keep it self-contained in such a way that it doesn’t depend on the previous steps having particular outcomes.

Let’s say you want to use a plastic-type material in your product, whatever that might be. You’ll need a machine that can utilize that plastic. You’re favoring polyurethane and have a machine in mind that can use it.

So what do you put down in your roadmap? Get polyurethane. Then, get a working polyurethane machine. No, no, no, you don’t do that. ????

When placing the polyurethane machine into your roadmap, you’ve essentially condemned yourself to alter your roadmap if your plan of using polyurethane falls through. 

What does this mean? Remember how I talked about efficiency and lines of communication? The team looking into obtaining machines for you isn’t necessarily going to be the same one testing the materials. If you’ve placed a polyurethane machine into your roadmap, you’re going to have them running around looking for a machine that is no longer practical for you.

That’s time, effort, and money wasted.

Long story short? Make your planning modular in the early stages, so you don’t run into these issues.

Stage #4: Parallel innovation processes

The process of utilizing a product development strategy can be a tough one. How are you supposed to tie a long-term strategy into your daily operations?

Well, there’s an answer to that, and it lies in parallel innovation processes.

The trick to doing both at once is tying them together. Sure, you can try and run your daily operations independently, but that’s just asking to be led astray.

The key lies in having two systems in place:

  • A system for planning and budgeting in the long-term, often yearly.
  • A system for the short-term to explore possibilities and select emerging concepts, often monthly.

So how do you tie them in? The outputs from your long-term process become your inputs for the short-term. 

In other words, you use the data you’ve gathered from your long-term vision projections as the starting points for your short-term.

You might think to yourself, what’s the benefit of doing this? Well, short-term planning without long-term management can be misguided, and the most crucial aspect of all is the budget aspect.

Every year there might be millions of product concepts thought up. However, you can only continue onto the creation process if you have the budget and assets to do so.

You can’t have your cake and eat it too. ????

The parallel innovation process keeps you on track to create only those products you’re capable of creating. Whether it’s due to budget restraints, technological limits, or simply a lack of resources, keeping your overall goal tied to the present circumstances will ensure you stay grounded.

That’s not to say that you can’t pick up ideas later on when circumstances change. Avatar had to wait almost a decade for special effects technology to catch up to James Cameron’s vision. In the meantime, Cameron devoted his attention to other projects.

The takeaway? Stick to what you can feasibly do.

Conclusion

So there you have it! You should now have everything that you need to create a workable, useful, and reliable product development strategy.

What’s next? 

Once your product is out there in people’s hands, they’re going to have things to say. It’s imperative you’ll learn how to collect this data, analyze it, and use it to create better products. Check out our customer feedback analysis article to understand what needs to be done.

Product Performance Analysis: Putting Your Data Into Action

Posted on by A. Levy

The world changes over time. That’s a fact whether we like it or not. When looking into your numbers, you might notice factors that seem to change for no real reason but time. Understanding why these changes occur and why your products perform how they do is the heart of product performance analysis and the key to your business’ growth. 

What makes a great product? Is it audience reception? Hitting a certain number of units sold? Making a certain amount of profit?

The answer depends on the industry, business, and specific strategic goals. A profitable product can be considered a failure, while a break-even one is a resounding success.

In order to determine your product’s performance and analyze it with your business plans in mind, you need a method that yields information on the individual product level. In other words, you need to employ product performance analysis.

What is product performance analysis?

Product performance analysis is all about measuring how well your product is doing with respect to the goals that you set out to achieve. It’s a process conducted by higher management, as they’re the ones with the information necessary to make such evaluations.

Unlike other analysis methods, product performance analysis is highly individualized, targeting a specific product at a time. It’s extremely rare for a business to launch multiple products with the same goals in mind, after all.

This means that every time you launch a new product, you’ll need to perform product performance analysis from scratch. But worry not! Once you’ve got the hang of it, the process of data gathering and analysis is actually quite simple, and similar methods can be used each time.

After all, it’s not how the data is being gathered that changes but what data you need.

The advantages of analyzing product performance

Before we get into the nitty gritty of how product performance analysis works, let’s talk about some benefits.

What we’ve laid out below will give you a general idea of what product performance analysis can do for you. Granted, this isn’t a complete list of the benefits it provides. That would stretch the word count into the high thousands as we’d need to get into really specific, niche situations. 

Let’s see what you have to gain.

Increased knowledge of customer-product interaction

Knowing how your customers interact with your products is vital when you’re in the product development stages of your project.

When designing a product, the first thing you should think about is what exactly that product will be used for. Then come the following questions:

  • What will it do? 
  • Who will use it? 
  • Why does it beat out the competition? 

Information from customer-product interactions will help you answer these questions in a data-driven way, by giving you insight into the minds of your customers. It’ll tell you what they want from your product, how you can improve it, and where you’re hitting the mark.

Performing customer-product interaction is especially important in software fields, where the ever-changing nature of the market means that you must keep a close eye on what your customers want from you.

Adobe has certainly taken this to heart, with their Acrobat 2020 version featuring several unique features that are clearly based on customer interaction data. 

For example, the software giant added a color customization capability in the Fill & Sign tool, allowing you to choose specific colors for your signature.

Adobe

On top of that, the 2020 version includes:

  • Improved accessibility features.
  • Support for the use of tablet pens when using the software.
  • Increased control of signature panels.
  • Touchbar support for MacBooks.

Many of these improvements are most likely born out of going over user data, telling Adobe that:

  • Users with accessibility needs were using their software.
  • Users were using tablet pens and other similar devices while using their software.
  • Users were signing documents with their software.
  • A high proportion of users were using MacBooks.

While the software industry benefits significantly from customer-product interaction, especially due to its measurable nature and ease of data gathering, it’s not the only one.

Other sectors can enjoy the fruits of such analysis by gathering user feedback via surveys or other organic manners like customer reviews. With the right analytic tools, you can discover a trove of data that will help you improve your products.

Reduced customer churn

It’s also been well-documented that acquiring new customers is significantly more costly than retaining your current ones. 

That’s why many businesses must invest in churn-reducing strategies. These include:

  • Lightning-fast customer support.
  • Behavior-based predictive analytics.
  • Personalized and focused promotions.

Another way is to give your customers what they want and need. By tapping into the information you’ve acquired from your product performance analysis, you may be able to adjust certain aspects of your product to keep your customers happy. 

Twitter, for instance, is rolling out an Edit function to select users, something that users of the platform have been asking for for years. 

Twitter

Improving your products is an excellent place to start, but it goes deeper than that. You need to make products that are not only useful but ones that understand your customers’ needs.

Recognizing user engagement drivers

It’s all well and good knowing what your customers like about your product, what they use, and what they don’t, but understanding the drivers of these is another matter entirely.

This is especially true for offline, physical products, where the link between what a product is nominally intended for and what it is actually used for can be radically different without any indication. 

I’m sure you’ve probably seen one of these, whether it’s what you made when you were in school or simply in passing.

Spider

It’s certainly recognizable as a spider decoration, but what isn’t always known is that the legs are made from pipe cleaners. These days, it’s very rare to come across one being used for cleaning pipes, actually.

Looking from the perspective of a product performance analysis, making arts and crafts with these would have been totally unexpected. Yet, it’s the main user engagement driver for pipe cleaners these days. It just goes to show, what you think a product will do isn’t always what it will end up doing.

A better understanding of your customer base

When attempting to create products, one of the first questions that are asked is often “who are we making this for.”

Tying in with user engagement, different demographics of consumers tend to have different habits, different ways of doing things, and different features that they want out of a product.

It’s true that everyone is an individual, and that no two people will want exactly the same thing. However, you can still make generalizations.

It’s not stereotyping to say that people over 70 will want large text options in media, after all that demographic tends to have worse eyesight than those younger than them. If you’re targeting over 70s, you should therefore include these options.

However, it isn’t always clear who is using your products. Looking at the case of the pipe cleaner spiders, the customer base for pipe cleaners is radically different from what was expected at the time of launch. 

Manual laborers vs. schoolchildren is quite a big difference, after all.

Product performance analysis can give you information on your customer base, who they are, where they’re based, what they do, etc. Information is power after all, and you can make your products more specialized and therefore more relevant if you know exactly who is buying them.

Of course, it’s entirely possible to end up with several different demographics buying your products. In fact, that’s likely the norm in a lot of markets.

What happens then? You can continue adding features that appeal to all demographics to make a product that’s a good average, or you can specialize.

One company that’s been on the ball with specialization in recent years is Wizards of the Coast. Their Magic: the Gathering cards are purchased by two main types of consumers:

  • Those who want to play the game because they find it interesting.
  • Those who want to collect the cards because they find them aesthetically appealing.

Starting in 2019, Wizards began making special cards with alternate artworks, designed to appeal to the second cohort of customers. You can see below the differences between these cards and the regular releases, with one being practical and easy to read, and the other more focused on appearance.

Shark

Wizard

These alternate editions of cards proved a huge success. As a distinct entity, they didn’t appear in regular product editions and so appealed to the second cohort without any backlash from the first.

How do you perform Product Performance Analysis?

Below we’ve laid out a list of steps for you to follow in order to create your analyses. With these templates in hand, you’ll be able to make adjustments that would fit the specific needs of your businesses and be on your way to a successful analysis.

#1 Set your goals

In an ideal world, all you’ll have to do is push the “analyze my product’s performance” button. In reality, setting your goals means deciding how to analyze your product. In other words, the first step is to determine what you want to achieve with your product. 

What would you consider a success? A product that’s a failure in one regard might be successful elsewhere. Some products are launched solely to make money, others have different aims. 

This question will dictate the metrics you’ll be using. Is it units sold? A certain profit margin? Beating out a competitor?

Then, you’d need to set up the timespan you’ll be looking at. Remember, some products take time to reach their full potential.

Let’s take a look at some examples to get a better feel of how it works. 

Promotional items

I’m sure you’ve seen those small gift bags given away at events and conventions. You might’ve handed some yourself.

As you may know, the purpose of these items isn’t to make a profit (not directly anyway), but to give event attendees a physical reminder of your presence there and warm them up towards your brand. 

To measure success, you may use “items given” as a metric. Perhaps a better one would be expecting an increase in traffic on your website in the days following the event. 

Raising awareness

Some products or campaigns can be created solely to bring attention to your brand. 

A good example of a campaign made to raise awareness is PlayStation’s Play and Plant initiative. For every player that reaches a certain section of the video game Horizon: Forbidden West, the corporation will plant a tree in their name.

 

Horizon

Players won’t buy the game to plant trees, but this initiative generates positive headlines for PlayStation and raises awareness of both the game and the brand.

Measuring the success of similar awareness efforts isn’t easy. 

Awareness is the first stage in the marketing funnel, and it may take a while for potential leads to convert into paying clients. Your best bet to assess this is by monitoring traffic, leads, and conversions over time, trying to find an uplift in these metrics.

Boost sales of another product

Whenever you look to purchase a new phone charging cable, it’s super cheap. In fact, you’ll probably wonder how on earth any profit is made from them. 

That’s because they’re not in fact designed to make a profit, but to support the use of the mobile phones that particular business sells too. 

With different types of phones come different connectors. If you purchase an iPhone right now, for example, you’ll need a different charging cable than you would if you purchased an Android. 

Put yourself in a buyer’s shoes for a second. 

If a particular brand of phone needs a charging cable that is expensive or difficult to find, you’re likely to look elsewhere for a complete set. 

You might even decide to buy a different model of phone when your charging cable breaks, rather than simply replace the cable if it’s costly or tedious to do. 

Thus, phone charging cables can be seen not as profit makers, but as support to the phones that a maker sells. Their success would be measured not in profits, but in customer retention rates. 

Ultimately, it’s up to you to decide, and with any luck, you’ll be able to pick sensible options that align with your business goals.

#2 Define the relevant data

Once you know what you’re looking for, the next step is determining which data is relevant. 

If you’re looking at product features, you’ll look to detect statistics and other product data sources.

If profit margins are your game, look to financial figures.

This step follows from the first, but the metrics that you use aren’t always obvious. If in doubt, think back to your overall business goals as an organization. Aligning these with your data collection will greatly assist in choosing metrics.

#3 Pick your methods of data collection

Once you’ve decided what metrics you want to track, the next step is to decide what methods you’re going to use to collect the data. 

Once again, this step is heavily dependent on the previous. The data you want to collect will determine the method of collection, with only a few different options available.

Are you looking for quick, easy-to-collate product ratings? Look to STAR reviews and similar.

Do you want detailed information on your product’s capabilities and how they meet your customers’ needs? You’ll need to search for more detailed review data.

Data collection can be done both in retrospect and in real time. Real-time data is usually considered more up-to-date as customer opinions can shift over time, but it is also far more difficult to collect.

Some ways of obtaining real-time data include sending out regular surveys, conducting incentivized review programs, and using software to obtain new information from the internet.

#4 Collect & analyze customer data

Once the first three steps have been decided, it’s time to put your data collection plan into action. 

The time scale of your plan will vary depending on your particular plan, but in general data collection should go fairly quickly.

When the data is collected, you should make sure to format it correctly. It’s no good having all the data in the world if your analysis software can’t read it. 

Collect data

This is especially true when pulling data from multiple sources that might have different internal means of formatting. 

What analysis tools you use, and what software you use, will again be determined by your needs. In the next section we’ve laid out a few different ways of performing analysis that can be useful in different contexts, and with any luck, you’ll be able to determine which one is right for you.

#5 Put the information you’ve obtained into action.

Finally, you need to act on the information you’ve found. There’s no use in doing all this analysis if you’re not going to do anything about the situation, after all.

When acting on your information, it’s important to keep in mind that this is all retrospective. Information quickly goes out of date, especially in the case of volatile markets such as fashion or software.

Ultimately, what you do will be heavily dependent on your situation, the information you’ve found, and the market you’re in. There isn’t really a right or wrong way of acting, however, we can give general advice on scenarios that might pop up.

  • Are you seeing that customers aren’t happy with a change? Rolling it back will be the way to go.
  • Are your products seen as outdated? You’ll need to look at your designs again.
  • Do you see a drop in sales? There will be a reason for that, you need to look further.
  • Are your competitors’ products seen as more desirable? Take a look at them and see what they’re offering that you’re not.

Analyzing your data

Product performance analysis has several functions, with the one you pick being the one most relevant to your goals. Below you’ll find some of the more common ones, how they function, and why they’re important.

Bear in mind that many analysts use multiple categories in order to get a more rounded view. However, the more types of analysis you use the more likely it is that you could get mixed signals from your data, so be careful!

Funnel analysis

Funnel analysis is all about diagnosing your sales funnel, a term used for customer journey analysis that starts with marketing, goes through to sales, then ends with purchasing. 

It’s about the actions the customer takes, rather than the actions of your business.

Funnel

Sales funnel analysis will look at the process’s separate parts, from the first interactions your customers have with you, to the end of the line when the purchase is made.

Trend analysis

Trend analysis in this case means tracking customer behavior. Opinions and beliefs change over time, and the behavior that these create will change accordingly.

Trend analysis uses both current and historic data to determine where the market is headed. It’s not always obvious when a change is beginning, so you need to be careful. What looks like a small rise in a figure could actually be the beginning of a drop, or vice-versa.

Trends

In short, only trust your data if it’s showing these trends over a long period of time.

It’s extremely useful to split customers into their demographics when performing trend analysis, as different demographics tend to have different behaviors overall. This is especially great for age groups since younger consumers tend to prefer a more tech-heavy experience than older ones.

Cohort analysis

This one is trickier to define. A cohort is similar in some ways to a demographic, that being that they are all customers who experience common things. That being said, it’s not quite the same as the event can also be factors like the month or time of day when the purchase occurred.

Cohort analysis is extremely useful as it tells you facts about your products over time. 

Are you seeing an increased number of complaints about product defects in one month, but not the one before it? It’s likely that your manufacturing tools have developed a fault.

Did reviews drop after a competitor launched their product? Customers are probably comparing your product to your competitors and finding that they fall short.

What’s difficult with this type of analysis is determining which cohort a customer will fall into. This is much easier in ecommerce, where everything takes place online, but can be done with proper data tracking for offline purchases too.

Customer journey analysis

While this might at first glance seem to be the same as sales funnel analysis, you need to remember that a customer’s journey doesn’t always stop at the point of purchase.

Customers are a valuable advertising tool, with it being well known that a friend referring a product makes it far more likely that someone will purchase from you than if they have no information.

Customer journey analysis tracks a customer’s behavior in the following stages:

  • Awareness.
  • Acquisition.
  • Adoption.
  • Assimilation.
  • Advocacy.

In each stage, the customer becomes more and more likely to do some of your marketing for you. Analyzing these steps will allow you to see what makes a loyal customer, and how you might improve the process.

You can read more about customer journey analysis here.

A/B tests

A/B tests are a means of checking if you’ve made the right decisions. They involve two metrics, one that you have control over, and one that you measure the outcome of.

Take, for instance, the color of the packaging you use for your product. This can be your controlled metric.

A/B testing

By changing the packaging from purple to orange, you can then measure the overall impact that this has on the other variable. This way you can optimize the things you can control about your product.

A/B tests are often used in the product testing stage with test audiences, as this is much less costly than rolling out the changes across an existing product. 

That being said, test audiences do miss things. Limited-time releases can serve the same purpose as tests, with the changes potentially being made permanent or into an offshoot if they prove popular.

Coca Cola

Coca-Cola Raspberry, for example, was first sold on a trial basis in New Zealand back in 2005. It was discontinued as planned at the end of the year, but has since been brought back and expanded to four continents.

What metrics you should use for product performance analysis?

When the word metrics is used, what it means is anything, absolutely anything, that can be measured and recorded about a product over time. This can be something as inconsequential as the volume levels of production machines, or as important as sales figures.

When we’re talking useful metrics, it refers to anything that can be used as a measure of a product’s success. 

We’ve laid out a few of the more important ones below, but be aware that it isn’t a be-all, end-all list. Any factor you think is important can be taken into account – it’s up to you to determine what is, and isn’t relevant.

Business-oriented metrics

These metrics mostly look at things from the perspective of your business and it’s relevant processes.

Revenue per product

Let’s start with the big one. Revenue.

The amount of profit you’re making is extremely important, as the end goal of most businesses is to make money and stay afloat.

The amount of revenue you make per product sold determines your profit margin. It will also tell you if it’s worth expanding into new territories where shipping costs will be higher, and whether or not the product would be worth keeping at all.

It all depends on the strategy you’re using. Some products rely on a high volume of sales with a low-profit margin, others the inverse. Keep your strategy in mind when analyzing this metric.

Cost to acquire new customers

It’s often said that it’s easier to keep existing customers than it is to attract new ones. While true, more customers is always better.

The cost of acquiring a new customer will give you information on how you should proceed with your marketing plans. Is your product one that will easily attract new faces? If so, you should keep it at the front and center of future marketing efforts.

On the other hand, if your product isn’t very attractive to new customers and will likely cost a lot to obtain, you’re better off focusing on keeping your existing customer base.

Customer lifetime value (CLV)

Customer lifetime value refers to the amount that a single customer is worth to your business over the entire span of your relationship with them. This can be anywhere from a single purchase to a loyal, lifetime subscriber.

CLV is a useful metric as it will tell you about customer behavior. It ties in with the customer retention rate metric that we’ll talk about further down, but is a more numerical indication with other functions.

How far should you go when attempting to retain customers? At what point should you be fine seeing them go? CLV helps you determine at what point it’s still profitable to try and keep a customer. 

Customer-oriented metrics

These metrics are all about your customer base, and how they interact with your product.

Revenue per customer

How much is a particular customer spending with you? Can you expect and rely on a high volume of purchases from a small group of people, or should you aim to market to a wider audience?

Revenue per customer ties into the customer’s lifetime value, but is aimed at short-term analysis in the immediate future, rather than the long term.

Customer sentiment toward products

How do customers feel about your products? Remember, emotion is a huge driver in choice when purchasing a product. Customers are willing to pay up to 140% more with a brand they’ve had positive experiences with in the past.

It’s the main reason we’ve created Sentimate, the world’s first AI-powered product insight engine.

With Sentimate you will have access to the combined might of all publicly available reviews on a product, using sentiment analysis to detect customer sentiment in highly contextualized situations. 

Customer retention rate

The proportion of customers who can be considered loyal is another great source of information.

How many of your customers stay with you after purchase? Can you expect repeat purchases, or should you aim your marketing more toward one-time customers?

Your customer retention rate will be highly contextual, depending on factors such as industry, sales model, and target demographics. By factoring that in, you can learn a lot more about your products.

For instance, USA Pan offers a lifetime guarantee on some of its products. That’s a literal lifetime, meaning that at any point between purchasing from them and your death, they’ll replace your products for you if they break.

Pie pan

Obviously, a low customer retention rate for these products isn’t a problem. In fact, even if it were zero then they wouldn’t see a problem with it.

If you sell a product with a limited lifespan, on the other hand, you’d be concerned if your retention rate was low. Context is key to this metric!

eCommerce-only metrics

We’ve split this section off from the main body since it’s so specific to analyzing the way ecommerce functions. 

eCommerce has a huge advantage in product performance analysis, since by it’s nature, information is communicated back to the hosts. I’m sure you’ve seen a little pop-up when an app crashes, asking to send a report.

Crash

The advantage is even greater in the case of self-hosted websites, in which the software that runs it is hosted on your own internal servers and therefore can be analyzed in the most minute of details. You don’t need permission to analyze your own files or to gather data on how your own servers are running, after all.

These e-commerce-specific metrics are heavily indicative of how well your assets will function, and of how they’re being received by users. While analyzing them might not be that straightforward, a means of gathering these metrics should be built into them in order to make data collection simpler.

Task times

How long does it take your customers to perform certain tasks? Is it around what you’d expect or does it take longer?

See, the thing about navigating websites or apps is that once you know what to do you’re completely fine. Developers will naturally know what software does and how to perform tasks, as they know it inside and out.

Your users, on the other hand, aren’t so lucky. If a task takes them significantly longer to perform than you think it should, they’re probably having problems. 

Whether that’s with finding the correct links, the interface layout, etc., is up to you to find out, but a task time will tell you that there is a problem in the first place.

Task exits

On the flip side, there are task exits. Is there a particular task or feature that a high proportion of users exit from? If so, you’ve probably identified a pain point that needs to be fixed.

Any place where many users stop using your website or app is an absolutely huge problem. It’s something that’s big enough to stop them from interacting with you altogether because of how much it frustrates them, which is the exact opposite of a good customer experience.

Errors logged

Errors are pretty self-explanatory, and they’re expected in self-hosted websites and apps more than template ones. It’s also a fact that nobody can release a piece of software without them, so you need to keep an eye on where they are logged if you’re using someone else’s software as a template.

The places where the most errors are logged can indicate where users are having trouble with your media, but it can also indicate the number of users using that feature. This will help greatly when prioritizing which to begin patching. 

A major bug that only affects a few users might be considered less important than a minor one that affects everyone. It’s up to you to decide, but error logging information can help you there.

Users unsubscribed

I’m sure you’ve all seen the little boxes that pop up when you unsubscribe from a service or mailing list. The ones that ask you “why did you unsubscribe” and potentially “here’s an incentive to not do that.”

Unsubscribe

The amount of users unsubscribing from your mailing lists or from notifications are useful, as it can indicate when problems began occurring and assist you with tracking them down. However, if you’re given the reason that users unsubscribe it will assist you far, far more.

(De)activation of features

Ah, features. The shining light and also the bane of software’s existence.

When dealing with modular apps, users can activate and deactivate certain features as they please. With this information, you can determine what features users like and dislike, as well as how certain cohorts use your app.

Naturally, this will give you insight into what future features you might want to add, what current features you should accelerate the development of, and what you might want to drop.

Session durations

Session durations are another fine source of information. The amount of time customers spend on your website or app can give you insight into how your customers interact with it.

Are they mostly spending five minutes here and there? It’s likely that you’re being used to find specific items that they trust you for.

Are sessions longer? It’s likely that users are either exploring your features or simply that they use you regularly as a reliable seller. You can cross-reference with your sales statistics to check this. 

Unique user rates

The number of users that are connected to you at any one time is useful information. The amount of unique users is much more interesting.

Your software will log every individual account’s interactions with it, thus allowing you to track the number of unique users at any point in time. This will let you see interesting pieces of information such as:

  • The average lifetime a customer will interact with you.
  • Whether or not new users are joining at the same rates.

This tells you how users are interacting with you.

Are they connected with you for short periods of time and be done with it? It’s likely that you’re being used to find the odd item that they can’t find elsewhere.

Are you seeing consistent use by the same users over time? You’re likely a lynchpin of their daily routines.

What happens if my data conflicts?

You’re never going to get the complete picture from a single piece of data. That’s generally why we try to analyze several in order to get a more rounded view of things.

Unfortunately, when you have multiple pieces of data that you’re tracking, some of them will inevitably conflict. If that happens, don’t panic! There is usually a solution, though it might not be immediately obvious.

Check your methodology

The first thing you should do when you’re seeing conflicting data is re-check your methods. If there’s a flaw in one of them, that might explain why you’re getting mixed signals.

If you find no flaws, you must conclude that the data is sound. But how can that be? How can two completely opposite things be true at the same time?

Well, you’ve got to consider that no two pieces of data are collected the same way. There’s always going to be a bias depending on the method. There might be a factor at play here that accounts for the discrepancies.

Online surveys are more likely to be completed by younger customers, for instance. If one piece of information was gathered online, and the other offline, they may be coming from different cohorts. 

Examine your cohorts

The solution there is simply to split your data to account for the differences between them.

Next, if you find no distinct difference between the cohorts that gave you the data, look to when or where in the customer journey the data was collected. Let’s take a look at customer sentiment, which tells you how customers feel about your product.

Are you dealing with after-purchase? At the point of purchase? 

Customers are much less likely to post a review as time goes on after the purchase. Thus, any review that’s posted a long time after purchase is likely to be heavily weighted. It’s also an unfortunate fact that the longer the wait the more likely that review is to be negative.

Thus, data that says customers are both pleased with your product and have a burning hatred of it, can both be correct. 

Consider randomness

If this step reveals no differences, the only thing to do is simply chalk it up to the uniqueness of the data. 

Each piece of data you’ll ever collect is unique. While there may be overall trends it’s entirely possible to end up with completely contradicting pieces of information by sheer chance.

The key here is to remember that no analysis will ever account for everything that a customer thinks. There’s always the chance that you had a boom in the popularity of a certain feature one month, then had it drop away the next, for example.

In the case of directly conflicting data, remember that it will have been pulled from different individual customers, with thoughts and feelings of their own. Customers aren’t cogs in a machine, their thoughts aren’t predictable and sometimes you just have to shrug your shoulders and re-do your analysis.

Wrapping up

Conducting product performance analysis is key to understand what your customers are after, allowing you to cater to their needs.

It’s not a one-and-done thing, though. 

You’ll need to constantly assess the viability of your products in the ever-changing marketplace. The good news is that it gets much easier once you’ve got the hang of it and have the tools for the job.

Remember that product performance analysis is usually done after the product has launched. To better prepare yourself for these stressful and joyous occasions, it’s best to have a solid go-to-market strategy. Check out our complete guide for more. 

 

Building a Successful Go-to-Market Strategy: A Comprehensive Guide

Posted on by Emily Louise Spencer

When launching a new product or entering a new market, you would want to get the best possible results in terms of sales, brand awareness, ROI, or other KPIs. 

However, you will likely lose more than you gain without a documented marketing plan. That’s why businesses rely on a go-to-market (also known as GTM) strategy to increase their odds of achieving their goals.

Creating this plan is relevant for all businesses – from SMBs and startups to the enterprise level. Moreover, refreshing the one you used for a previous launch is always a good idea as circumstances, and people change.

In this complete go-to-market guide, you’ll find everything you need to get you running, including:

  • What is a go-to-market strategy is.
  • Why it is important. 
  • The key components of an efficient go-to-market strategy.
  • How to craft a successful one on your own. And,
  • Examples from leading brands.

Let’s get started. 

What is a go-to-market strategy?

A go-to-market strategy is a comprehensive plan that outlines how a new product would reach its end customers. 

Generally, every go-to-market strategy outlines the value proposition, target audience, entire marketing plan, and sales strategy. 

Sounds like your regular run-of-the-mill marketing plan, no? Well, there are a few key differences.

Go-to-market strategies vs. marketing strategies

If you’re in the early stages of launching your brand, your go-to-marketing, and marketing strategies might be fairly similar, but once you’re well established, they will diverge and become very different.

You can sum the differences up as follows:

Go-To-Market Strategy Marketing Strategy
short-term long-term
driven by a specific product business-wide
designed for product launch covers all time periods

 

Why are go-to-market strategies important?

Strategy is key to success in today’s markets. Creating a quality, data-driven, clear marketing strategy helps businesses to understand their aims and goals. 

First, it clarifies the reasoning behind the launch of a product or service, identifies the target market, sets a pricing strategy, and outlines the ways to draw and engage customers to a brand.

Secondly, a go-to-market strategy provides some quality control.

The design of a go-to-market strategy forces a business to evaluate and consider all the issues customers might have with their product or service. 

Identifying and mapping potential pitfalls helps brands to improve their customer experience – from product development to informing sales and support teams – creating positive sentiment and maintaining customer loyalty. 

Let’s talk about what makes for a good go-to-market strategy and what difference it can make for your success. 

What are the components of a go-to-market strategy?

go-to-market strategies have several layers, which we’ll discuss in more depth later. In general, a solid document will contain your:

  • Objectives: What you plan to do and how to achieve your goals.
  • Customer attraction strategy: How you plan to attract customers and convince them that you’re the best option for them.
  • Sales strategy: Your sales model and how you intend to promote your product.
  • Delivery strategy: How you plan to get your products to customers, whether via direct shipping, through a middleman, etc.
  • Customer support strategy: How you plan to handle potential issues and support your customers when they have difficulties using your products.

While every product launch should focus on the “objective” part, the other aspect will be prioritized differently, based on conditions such as the market and the product itself.

For instance, launching an iterative piece of software will require you to focus efforts on customer support, and a new yogurt flavor may need a clearer sales strategy.

To understand how to slice your pie the best way, you’ll need to perform quality market research and dive into the data.

Here are some points to consider.

4 key points about data-driven go-to-market strategies

Like many other marketing solutions, when done right, the go-to-market strategy is very useful and improves a brand’s sales and earnings. 

There are a few components for an efficient and effective go-to-market strategy. One main thing to consider when creating a marketing strategy is its market definition. 

A good go-to-market strategy has to define the consumer market for a product or service, helping optimize short- and long-term marketing efforts.  

Another important aspect is the focus. The marketing strategy needs to focus on the product or service and its benefits to customers in the current market. It should highlight what a brand can offer customers that competitors can’t. 

Additionally, an efficient go-to-market strategy should be flexible. In an ever-changing market, innovation is key. A successful go-to-market strategy is pliable and can be modified to match brand innovation. 

Solving customer pain points

A pain point is a problem current or potential customers are experiencing with a product.

Pain points can be present in many different parts of the customer experience:

  • Financial: Customers spend a lot on the current product or service and want to reduce costs.
  • Productivity: Customers waste too much time using the current product or service and want a more efficient solution.
  • Support: Customers aren’t getting the support they need along the customer journey stages.

Moreover, many customer pain points combine issues from several categories. 

To successfully deal with customers’ pain points and present your brand as a viable solution, you first need to identify the problems. 

A quality go-to-market strategy relies on data collected to do just that. 

Improving product marketing

Product marketing is the term for promoting and selling a product or service. 

It entails deciding on product positioning and messaging, launching the product, and more. Successful data-driven product marketing relies on quality information.

And to get that information, you’ll need to perform market research.

This will provide you with information about potential customer markets, along with the needs and pains that affect them.

One way of performing market research is by listening to your customers.

Social media has become a platform for customer reviews, customer service, and product promotion. 

Through this, social listening is a great way to assess what messaging will work best and learn what social sentiment a brand is creating.

The go-to-market strategy provides a sturdy base for more focused market research and voice of customer analysis. 

Using a well-constructed strategy ensures the messaging is consistent and in tune with buyer personas and attitudes, helping sales teams to optimize marketing and get better sales and revenue.

Innovating your brand and product

As we said earlier, innovation is key in today’s highly competitive market. Businesses innovate using two main ways: 

  • The first is product innovation, meaning a new solution to a problem many consumers encounter. A brand can offer a product that addresses a formerly untouched issue or one that addresses the problem in a different way. 
  • The second is brand innovation, which is when a brand does something new. This can be launching a new product or making changes to an existing one. 

Creating a go-to-market strategy is a great foundation for a successful innovation of any kind, especially when it’s data-driven.

Having a strategy helps focus innovation efforts around set goals. 

Moreover, It maintains priorities and sharpens innovative ideas. This creates an improved innovation process that is more likely to aid brand growth and survival.

Crossing into new territories

Cross-border ecommerece shopping is taking the world by storm. It’s set to exceed $1.9 trillion In 2022, growing even further in 2023. 

As consumers shift more and more to online shopping, businesses must prepare themselves and expand their ecommerce abilities to new territories.

But before opening up your wares to international shoppers, it’s imperative to prepare a strategy to penetrate these new markets. 

A few essential steps to make before the expansion include product research, cross-border taxes, logistic costs, language barriers, and more.

Gathering data for a data-driven go-to-market strategy

Now that we reviewed the aspects and advantages of the go-to-market strategy, let’s talk about how you can get the data needed to create a data-driven one. 

Performing customer-centric market research provides insight into customer desires, needs, and attitudes.

Revuze offers AI-powered Customer Experience (CX) analysis to help you better design marketing strategies. 

Revuze developed the first self-training, low-touch AI technology that collects and analyzes data automatically and delivers consumer insights valuable for data-driven go-to-market strategy design.

How to build an excellent go-to-market strategy?

By now, you might be thinking, how exactly do I build a go-to-market strategy? I’ve read all of this information on what they’re about and what they do, but I have no clue how to build one. 

Fear not. We’ve outlined nine simple steps to take you from novice to expert.

#1 Find your product-market-fit

Every product launch should be designed to solve a problem.

A great product looks at what consumers want, addressing their pain points and drawing customers to it. 

There’s no use in providing a product that a competitor makes cheaper, sturdier, and easier to use.

It’s a concept known as product-market-fit, the ability of a product to satisfy a demand that the market creates. 

If you manage to nail down your product-market-fit, you’re off to a great start.

#2 Define your target audience

Every product launch has a target audience. Those people who ideally will be the ones to buy your product. If you want to define them, you need to look at the following factors:

  • What problems does your product solve?
  • Who has these problems?
  • How much are they willing to pay to solve said problem?

If your product only solves a minor problem, your price must reflect that. Customers aren’t usually willing to spend a lot to satisfy a minor issue.

#3 Research your competition and the current market state

Unless you’ve spotted a gap in the market that no one else provides, you can expect to see competitors already existing within your market space. 

In order to get a leg up on them, you need to know them. Asking the following questions will help see the full picture:

  • Who already provides a similar product?
  • What demographics and geographic areas do your competitors consider their target audience?
  • Are your competitors meeting the demand that customers create? Is the market oversaturated, undergoing scarcity, or somewhere in between?
  • What do you provide that your competitors do not? Conversely, do your competitors’ products have any features that yours lack?

Competitive analysis, as it’s known, is key to understanding your position within the market, your strengths & weaknesses, and any opportunities & threats that might come your way.

#4 Decide on your key messages

Once you know who you’re targeting, you need to decide what messages you’ll convey to them.

Each demographic you target will require a personalized approach since they will react differently to the same message.

You should create what’s known as a value matrix. This is a summary of:

  • Their pain points.
  • How your product might solve said pain points.
  • How do you plan to convey that to your customers?

Buyer personas will assist you greatly here, as well as simulations of customers with their problems, values, and goals. 

You can use these to get an idea of what a particular demographic might want and how they might respond to you.

#5 Map out your customer journey

The customer journey is the sum total of interactions that a customer has with you, from first hearing about you and your products, all the way to the point of purchase. 

The way to map out your customer journey is to identify:

  • What touchpoints exist between you and your customers?
  • How do you want to influence your customers at those touchpoints?

And from there,

  • What type of interaction is needed to facilitate your ideal influence?

The best way to visualize your touchpoints is in the buyer’s funnel. This splits the customer journey into three sections:

  • Top: Customers have a problem but are not yet in contact with you.
  • Middle: Customers know you exist but aren’t sure if you are the best option out of the range of potential products.
  • Bottom: Customers decide whether or not to purchase your products.

The touchpoints within each funnel section will roughly aim to grab the customers’ attention in the top phase, convince them what you offer is best for them in the middle phase, and convince them to commit to buying from you in the bottom phase. 

With the combination of your aims at each step and your target demographics, you can work out exactly what you need to communicate to your customers and how you should do it.

#6 Choose your marketing channels

Marketing channels vary wildly, from TV commercials to internet adverts, newspaper prints to marketing emails. 

Each demographic will have its preferred way of communicating, and it’s up to you to align with your customers’ preferences if you want to stay relevant.

Generally, you should choose your marketing channels based on how your demographics consume content. If you have multiple target demographics, choose multiple channels accordingly.

Further, we recommend using different marketing channels for each customer journey stage. 

For instance, a YouTube ad might make customers aware of you and push them down the top of the funnel, whereas an email or presentation will help them pick you out from among dozens of other products within the middle.

#7 Choose your sales plan

Ultimately, a go-to-market strategy aims to generate sales and revenue. Thus, you need a sales plan. 

There is a myriad of different sales strategies you can use, but some of the most common ones are:

    • Self-service: Customers find you and purchase from you on their initiative.
    • Inside sales: Your sales team forms a relationship with your customers and convinces them to buy from you.
  • Field sales: Your sales team focuses on closing big deals, focusing on enterprises.
  • Channel sales: You pass your product on to an external partner, who sells your product for you.
  • Inbound sales: Sales processes are adjusted based on buyer actions.
  • Outbound sales: Sales processes are adjusted based on seller actions.
  • Cross-selling: You focus on selling your product in conjunction with others.
  • Up-selling: Your sales team takes existing customers and encourages them to upgrade.

Each of these models has its strengths and weaknesses, and the decision to use is ultimately up to you. You should pick one that aligns well with your product and business model.

#8 Decide on your goals

Goals are factors such as sales figures in a specific amount of time, sales figure growth, amount of consumers contacted, etc.

They tell you whether or not your strategy is working and whether carrying on the way you currently are is the best way to continue.

Goals often fall under frameworks such as:

  • Key Performance Indicators (KPIs).
  • Objectives & Key Results (OKRs).
  • Specific Measurable Achievable Realistic Time-Bound Goals (SMART Goals).

You can use one of the above to set your goals, a combination of two, or even all three!

#9 Lay out the steps that will help you achieve your goals

Now that you know what you want and how you can achieve it, it’s time to set out the steps to help you get there.

Creating a clear and well-crafted go-to-market strategy means working backward, seeing the obstacles that might appear in your path, and how to avoid them. 

For instance, you might have a goal of selling 10,000 units of your product within a month.

However, an obstacle you foresee is that your sales teams might use different strategies, only some of which are effective.

The solution to this problem is to find the optimum sales strategy and communicate this to all teams. 

Of course, these steps aren’t the be-all, end-all. 

Once you have a go-to-market plan, you may need to adjust it based on new information. 

This doesn’t mean that you’ve failed to create an effective strategy. 

A go-to-market strategy, by its nature, treads into untested waters, so there are bound to be a few hiccups.

Keep your steps clear and flexible in case you need to re-evaluate your strategy. Share any updates you make with your teams, stakeholders, and management so that they know what’s going on and, most importantly, why it’s happening.

You should be all set by now, ready to draft a winning go-to-market strategy. But before you go and do that, let’s check out some winning examples from leading brands.

Winning go-to-market strategy examples

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Smart Coach by Fitbit

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Fitbit manufactures activity trackers. A few years ago, they launched a premium service and personal training app, which can be integrated with the user’s Fitbit. 

Fitbit’s go-to-market strategy for the Smart Coach involved:

  • Using paid and owned channels to reach the target audience. 
  • Understanding their target audience consisted of people who own Fitbit devices. 
  • Leveraging push notifications, social accounts, and emails to reach potential customers. 

As a result, Fitbit earned around $192 million in revenue through its GTM strategy. 

Key Takeaway: If you are releasing a new feature, inform your existing customers first. 

Eight Sleep’s partnership with IFTTT

A smart mattress manufacturer, Eight Sleep, created a go-to-market strategy for a new feature of their existing product. 

Eight Sleep partnered with IFTTT, a free service that lets you create conditional statements and integrate various apps. Together, they developed a new feature that allows its customers to simplify their night and morning routines. 

Users can connect their mattress with their smart home system to:

  • Turn lights on or off.
  • Start their coffee machines.
  • Lock the door.
  • Activate bed warming. 

Customers could perform all these activities from their smartphones and virtual assistant devices.

Eight Sleep’s go-to-market strategy for the new feature involved:

  • Sending emails to the entire user base to help them realize the possibilities. 
  • Creating a dedicated landing page to inform and educate users about the new feature.
  • Highlighting the benefits and use cases of their feature on Facebook and Instagram. 
  • Getting themselves included in the IFTTT guide and newsletter. 

Key Takeaway: Apart from informing your existing customers, leverage social media marketing and get featured in major publications to broaden your reach. 

Upscope leveraging live chat to target a new segment of customers

Upscope is a screen-sharing software. When it was founded, many screen-sharing software packages were already available in the market. 

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To make themselves stand out, they created a GTM strategy that consisted of: 

  • Creating ways to use live chat to target a new segment of customers (technical support, onboarding specialists, and customer success teams). 
  • Leveraging content marketing to drive traffic to their website.
  • To get listed on their websites, partner with existing live chat companies such as LiveChat, Zendesk, Drift, and Intercom. 

As a result, Upscope has acquired over 600 customers and is increasing. 

Key Takeaway: Partner with other businesses with a complementary audience to yours. Use their existing reach to boost your brand awareness. 

The new storytelling feature launched by VSCO during COVID-19

VSCO allows users to capture and edit visuals (photos and videos) and launched a new tool called “Montage.” 

It is a multimedia creation tool that brings visual storytelling to life in a new dynamic way through a video. 

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Their go-to-market strategy involved addressing the current environment and our challenges as humans. 

Their product announcement message was also crafted keeping in mind how their product helps us connect in the age of social distancing. 

Their email copy reads, “as the world slows down, we know that these times can be difficult and uncertain. And in a small way, we hope our community connects you with others around the world.”

This is great because they first addressed the current situation and then how their product helps us solve this problem. 

Key Takeaway: In times of crisis, aim to help your community. Explain how your product can help your customer in difficult times. 

Nisolo launches new slippers to make Work From Home more comfortable

When most people around the world stay at home due to the fear of COVID-19, Nisolo launched a new slipper to make work from home more comfortable. 

Nisolo ensured their marketing message doesn’t look promotional and showed how they care about their customers. 

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Nisolo’s email copy first focuses on the email subscribers’ emotional well-being and then announces its new slippers. 

Key Takeaway: Create unique products that focus on helping your target audience rather than selling to them. 

Huawei’s entry into the Indian market

Huawei is one of the most prominent telecom suppliers in the world. However, the telecom equipment market was overcrowded when Huawei was planning to enter the Indian market. Their biggest challenge was to make an impact to outdo their competitors (Apple and Samsung). 

To increase its chances of succeeding in India, Huawei developed a go-to-market strategy that involved building local R&D centers to hire locals and show commitment to creating value for the country. 

Further, Huawei partnered with a leading Indian English-language news channel to sponsor a contest. In the competition, Huawei smartphones were projected as aspirational products, contrary to the popular belief that Chinese products are low quality.

As of now, India is Huawei’s second-largest research base outside China. In the first three quarters of 2017, Huawei grew 60% in India’s enterprise business, higher than the global average (43%). Huawei India’s global production increased steadily until 2021 when the 2019 US sanctions against China caused the business to drop production.

Key Takeaway: When entering new markets, identify your biggest challenge and create strategies to solve them first. 

TaxJar’s content marketing strategy to build trust

TaxJar offers tax solutions to businesses. When launching, the company looked at itself as a technology company first and a tax company second. Their primary aim was to make a better product than what was available in the market. 

They also noticed that most of the content on the internet related to tax was either hard to find or difficult to understand. 

TaxJar started publishing the best possible educational content to help its target audience understand everything about sales tax. 

As a result, TaxJar built trust with its target audience and started getting customers. 

When it comes to sales tax, more than 20,000 businesses and developers trust TaxJar.

Key Takeaway: Conduct market research to identify gaps in the current market and fill them to build trust with your audience. 

Symyx’s plan to penetrate new market segments

In 2008, Symyx created a GTM strategy to ensure the successful launch of its ELN (Electronic Laboratory Notebook). 

Symyx’s go-to-market strategy included:

  • Print advertising to boost brand awareness and build confidence. 
  • Author or appear in 12 feature articles in target publications to emerge as a thought leader in the ELN market. 
  • Publish case studies to demonstrate the effectiveness of their product. 

In the same year, Symyx generated $9.6 million in revenue. 

Key Takeaway: Make the most of PR strategies and demonstrate what value your products can generate. 

Slack’s product-led go-to-market strategy

Slack is one of the leading business communication platforms in the market. 

Slack’s go-to-market strategy was to rely on product features and usage to increase customer acquisition, retention, and expansion.  

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They didn’t aim to sell software. Instead, it sought to sell a positive user experience. 

In the memo shared by Stewart Butterfield to his team before they released the product, he said, “People buy “software” to address a need they already know they have or perform some specific task they need to perform. 

However, if we are selling “a reduction in the cost of communication” or “zero effort knowledge management” or “making better decisions, faster” or “all your team communication, instantly searchable, available wherever you go” or “75% less email” or some other valuable result of adopting Slack, we will find many more buyers.”

Slack ensured that its product was better than any other business communication platform. They also ensured that their product was user-friendly and easy to use. Slack created a “customer development team” to better serve its customers. 

As a result, Slack became the fastest-growing SaaS company of all time. Slack grew from $0 billion to $4 billion in valuation in four years and currently earns over $250 million a quarter as of 2022.

Key Takeaway: Make your product better than your competitors. Create an excellent customer support team to help your customers make the most of your product. 

Go-to-market strategies in times of crisis

COVID-19 is somewhat behind us, but it taught us much as marketers.

Launching a product during a crisis is different than entering the market on regular days. You need to be very cautious with your sales strategies, marketing messages, and who to target.

Get yourself ready for the next turmoil by following these tips.

Optimize your messaging, targeting, and pricing

As a business owner or a marketer, it is your responsibility to ensure your messaging doesn’t hurt your target audience’s sentiments. 

For example, during the COVID-19 times, using words like “get in touch” or “meet our team” wasn’t a good idea. Instead, we used phrases, such as “call our sales team,” or “let’s get on a video call to discuss business opportunities.”

Make sure to optimize the people you are targeting. If you were targeting small businesses before COVID-19, check if they are operating now or are adversely affected by the crisis.

At the same time, the world economy is taking a hit. Many people and businesses are struggling financially. If you can afford it, reduce your product’s pricing for a limited time. 

For example, ABB has waived the fee for its numerous software services until the end of 2020 including ABB Ability Connected Services, RobotStudio, ABB Electrical Distribution Control System, and iUPSGuard software for hospitals. 

Focus on making things easier for your customers

In any type of crisis, people are going to be stressed. 

To help reduce the stress, look to eliminate any barriers to helpful information, offer additional access to support resources, and reach out to existing customers to understand their situation.

Campaign Monitor sent an email to all its subscribers that gave them an option to “pause the marketing emails for 30 days.” They also added a link to new content relevant to the times of COVID-19. 

This is great because not everyone wants to receive promotional emails at this time. When a brand takes the initiative to make its customers’ life easier, it will be remembered for longer. 

Help the community to earn a good name for your brand

Helping the community shows you are not just here to make money, and you care about the people around you. 

Therefore, it is crucial to help your community in any way possible. It doesn’t matter how big or small your contribution is. 

For example, to help first responders fight COVID-19, Under Armour delivered 20,000 face masks to Johns Hopkins Health System. 

Under Armour also donated $1 million to Feeding America to support hunger relief efforts due to current school closures and quarantines. 

Think beyond the immediate crisis 

While optimizing your go-to-market strategy in times of crisis, it is crucial to think beyond the immediate crisis, as each presents lingering effects.

Most people may be done with face masks, but social distancing is still prevalent.

Brands with offline stores must consider ways to sell products and accept payments while prioritizing social distancing.

Companies that relied upon on-field sales agents to sell their products will have to think of new ways to get their products across, such as self-service or inside sales business models. 

The best way to “think beyond the immediate crisis” is by building a team of creative people who can brainstorm and predict how the world might change. 

Note: It isn’t only about your company or your industry but about how the world might change after the crisis. Think about how you can use it to create new business opportunities. 

Wrap-up and takeaways

A go-to-market strategy helps you ensure your product launch succeeds and acquire customers in the tough competitive market. 

It’s important to remember it’s ever-changing. A GTM strategy that proved true and successful last time won’t necessarily yield the same results. 

You must keep up with the times and the people.

Data-driven market research will help keep an eye on what customers need and what pains them.

Only then you’ll be able to devise a successful and fresh strategy to launch your brand new product and service.

And what happens after? You’ll need to start getting feedback and analyzing it. But that’s a story for a different blog. Read it here.

How To Use Product Insights To Inform Product Strategy

Posted on by Emily Louise Spencer

When it comes to improving your products and developing the strategy by which you intend to market them, nothing is more important than knowing what works and what doesn’t. In business, very few stakeholders will want to take a step forward unless there is a decent chance of return on investment.

Unfortunately, we live in a world where changing expectations and shifting culture means that it isn’t always clear cut what will be successful and what won’t. That’s where product insights based on market research can help.

What Is Product Strategy?

Product strategy is a plan encompassing everything that you want to achieve with a specific product, what steps you intend to take to see that through and how that strategy links to the overall goals of your business.

Product Insights Infographic

There are a number of elements to a product strategy, starting from the very beginning with the drawing board and finishing up with where you want the product to sit in the market. Each step posits certain questions that you need to ask yourself before moving forward:

Design: What do you intend to sell? How will your design attract consumers? Will your design stand out amongst the market or will it conform to the accepted norm?

Features: What will your product do? How will that set it apart from others in the same market? Are you going to combine multiple features into one item?

Quality: What will your product’s quality be? Are you intending to create disposable or multiple use items? Your product’s quality should match those already within the market at the least, and exceed if you intend them to be reusable.

Branding: Will you market your product as part of an existing line? WIll it be standalone? Brands have reputation and power, something that will help a lot when you’re starting out.

Target Market/Demographic(s): Who do you intend to sell to? Do you have a niche audience or is this new product something anyone would buy? You can charge more for specialized products that few will buy, but there will be fewer sales overall.

Positioning: Where do you plan to position this product in the market? Is it intended to replace the current frontrunners? Is it going to be an affordable alternative?

All these questions are easy enough to answer from your own perspective, but you need to remember that you and your team aren’t necessarily going to be representative of your customer base as a whole. 

If you’re going to answer these questions for consumers in general, you’ll need information on what they want and what you can give them – product insights.

[banner_text text=”Research insights on any product” button_text=”Get started” button_link=”https://sentimate.com/signup/”]

What Are Product Insights?

Product insights are a peek into the consumers’ minds when they’re using a product. Put simply, it’s a broad term that covers any and all information you might have that describes a user’s experiences related to a product and the analysis of those. You can split product insights into two types:

Qualitative Insights

Qualitative insights are factors that you might call arbitrary or without a scale. This type of insight is usually found in the more expansive surveys and reviews that users and buyers leave behind on products. Don’t be fooled into thinking that these types of insight aren’t useful because they can’t be measured, they can give you details that mere numbers never could.

As an example, someone stating that they didn’t like your product falls under quantitative insights as it’s a simple yes or no answer. If they state why they didn’t like it, that falls under the qualitative insights umbrella.

Quantitative Insights

This type covers anything that you can statistically measure. It can potentially come from pre-existing data, for instance customer retention rates, ratio of online to in-store purchases, etc. 

The trouble is, most of the data that already exists isn’t set in a vacuum. You can say that the sales of a certain item went up at a certain time that coincides with a holiday season, however there are likely multiple factors at work that could influence the shift in sales. Breaking the data down by demographics, location etc. will help but not entirely eliminate this problem, and often product insight teams will find themselves trying to set up surveys to fulfill specific niche questions their existing data doesn’t cover.

In the end, finding quantitative data that’s absolutely controlled isn’t necessary though, as the accuracy in your predictions you get has diminishing returns. There’s a certain point where you call it a day, and it’s up to you to decide where that line lies.

The Value of Data

Product insights come from your consumer base. They’re the ones using your product after all, and will have far more insight into how it functions and where its strengths and weaknesses lie than anyone who looks at it through an analytical lens. Post-It notes were originally created to be bookmarks for example, but found much more success in their main function today as reminder notes. 

When it comes to data sources, there are plenty of them out there to pick from. Which ones you put the most weight on will depend entirely on your industry, business model etc. but they’re all generally useful to some extent. Some of the more popular ones include:

  • Reviews
  • Questionnaires
  • Point of Sales Figures
  • Mobile/Website Data Tracking
  • Video Cameras/People Counters

What Do You Get Out of Product Insights?

Analyzing product data isn’t easy, but there are software packages out there that can help you. Most of the more commonly used ones contain several key metrics that you can look at in order to determine what you data is telling you, including:

  • Customer Sentiment
  • SWOT Analysis
  • Retention Rates
  • Referral Rates
  • Revenue Trends
  • Competitive Landscaping
  • Consumer Decision Factors

These metrics are designed to be easy to understand and therefore easy to implement – most reports will tell you their key points at a glance after all! 

You need to keep in mind though, that the more specific the issue the more you’ll need to delve into the data. Be selective about what data goes in and you’ll get a more specific answer out, though that will require some understanding of the data you’ve collected. 

North Star Metric: Your Defining Vision

The term “north star metric” is one that’s linked heavily to the success or failure of a particular product strategy. The term comes from an old sailing practice, where one would “follow the north star” to find which direction is north at night since the star in question didn’t move relative to the Earth’s rotation. 

Essentially, it is the key metric by which you define how successful you’ve been and whether or not you’ve hit your targets and solved the base customer problem that your product team was attempting to solve. You can use the term to reinforce what you’re doing as the campaign goes on, aiming your sights directly at the metric you’ve decided to target.

A good north star metric contains both the problem you’re attempting to solve and the desired outcome. An example metric might be:

 “To raise the quality of our product’s manufacturing so that they don’t break as often”. 

In this case, the product breaking is the problem and the quality being raised is the vision of what you want to achieve. The key measurable metric in this case would be the number of customers reporting broken products, with a decrease in the proportion being considered a success.

Combining Product Insights With Product Strategy

As mentioned above, a product strategy is set out by defining several characteristics that you want your product to have, based on questions that you ask yourself about the market, your consumer base and the product itself. Let’s break this down and see how product insights can help you when you’re generating a product strategy.

Design

When you look at the information on design preferences, you might find complaints or reviews that indicate flaws in existing designs that you can take advantage of. This could be in the early stages when you’re analyzing what exists already in the market, or later in testing when your product has been designed.

Some folk might be adverse to making changes when the development process is part way through and manufacturing has already taken place, but you shouldn’t hesitate if major issues crop up. A design modification early on in the process is less costly than one further on or your product, or if it fails.

Features

When you’re deciding what features to put on a product, oftentimes you’ll end up with more than it can support in the beginning as every suggestion is noted. Using product insights, you can narrow down that list to a more feasible one.

Product insights will tell you which features are the most sought after, which are seen to work well together and what features can be safely dropped without complaints from customers.

Quality

What you want your quality to be depends mostly on what market you’re going into, and product insights can tell you a lot about that space. An example of high quality products bringing success were the Dualshock game controllers initially released in the early 2000’s, which overtook all others to become the standard in the industry.

Branding

Insights can tell you how likely consumers are to go for branded products vs generic, and which brands they prefer. It isn’t really that useful when you’re pre product launch, but can help afterwards.

Information on how customers are responding to your branding choices can also help you decide when and how to change it with a rebrand or a brand refresh, if the need ever arises.

Target Market/Demographic(s)

This one is fairly self explanatory. By checking the information available you can see how well your target markets/demographics might view your product, what they want out of it and what they expect to find. 

Of course, you shouldn’t simply limit yourself to one choice if multiple of them seem promising, but in general if you do this you might need to create a personalized marketing campaign for each in order to effectively promote your product.

Positioning

This one is trickier. While you can have ideas about how your product might fare by looking at existing ones in the market that are similar, you’ll never really know where you stand until you launch. 

What product insights can tell you on this front is the minimum requirements to both enter the market, and be a market leader. Using these, you can have a vague idea of where you will end up based on your current features, branding, quality etc. and plan accordingly.

Aims of a Data-Driven Product Strategy

At the end of the day, you use product insights with the intention of making your product strategy more successful. Your north star metric will measure how much you’ve achieved this but at the end of the day there are two main things that drive purchasing, and therefore determine the success of your product.

Product Insights Infographic

Customer Wants

How closely have you matched what consumers seemed to ask for? Was it even possible to match their desires whilst retaining a decently low price tag? It’s important to remember, however, that some of these desires are going to conflict and that you can’t please everyone. 

If customers do end up having radically different desires, you can always branch out and create specialized products after the general version has been released, but your primary focus should be on creating a good all-round product.

Customer Needs

While it might seem arrogant to assume that you know better than your customers what they need, taking a look at the underlying issues that cause their requests can definitely pay off. People are far more willing to pay for something that solves their root problems than something that simply treats the symptoms of it.

As Henry Ford once said, “If I had asked people what they needed, they would have said faster horses.” Take advice from, but don’t limit yourself by, what consumers want.