Great Product, Failed Launch

One Chief Revenue Officer of a B2B services firm that recently failed in their productization efforts shared,

“There was this assumption that we could just hand the new product over to the sales team and they will sell it because ‘it's new, it'll be exciting!’ That's not the way it worked. 

There has to be a strategy about who we are selling to, the pricing, the packaging, how we will generate leads and what skills we need to sell. Developing that go-to-market strategy should have started at the same time we began developing the new product.”

Not having a well-developed go-to-market strategy is a common failure point we see. An organization decides to productize¹ and develops a differentiated new service, solution or product that meets a real market need. BUT the new offering stalls after beta and does not generate the expected sales.

The product is a great idea but the launch is a failure.

Why?

Because the organization under-invested in the go-to-market strategy and capabilities needed to execute the strategy. There are three common mistakes we see.

Mistake #1 - Commercialization Strategy Takes a Back Seat to Product Development 

Through our experience guiding organizations to productize their services, it has become clear that most B2B services organizations don’t fully grasp the importance of developing a go-to-market strategy and adequately investing in the capabilities to execute the go-to-market strategy. We see this mistake over and over again: 

New product go-to-market is an afterthought. 

We take some responsibility for this.

In our first book, Productize: the Ultimate Guide to Turning Professional Services into Scalable Products, we introduced the Productize Pathway®, a methodology specifically for B2B services organizations to identify new product or solution opportunities, test those quickly, develop them with the help of customers, launch them, and then continue to manage them across their lifecycle:

We devoted one chapter to the developing and executing of the go-to-market strategy. As you can see in the circle, we also positioned the Launch Boldly phase as something that happens after the product is designed and developed.

But the most successful organizations begin creating the building blocks of their new product launch plan from the very beginning when they begin to define the most attractive market segments and define how their product will make money.

The commercialization strategy is developed and fine-tuned throughout the entire cycle and you have a rough sense of how you will go-to-market before beginning to develop the concept. The information that you are collecting to develop your productization vision and product design, are inputs into your market segmentation, pricing and packaging, messaging, and sales channel decisions. 

Mistake #2: Thinking Too Narrowly About Go-to-Market Requirements

Typically, when we say that Launching Boldly includes strong ‘go-to-market’ (GTM) we mean two things:

1. A ‘go-to-market’ strategy, and
2. ‘Go-to-market’ capabilities to implement the strategy

A good go-to-market strategy, answers the questions:

• What do we sell?
• To whom?
• How?

Unfortunately, a lot of companies only think about one or two of these questions when they make the decision to develop a new product or solution.

We often see leaders confuse go-to-market strategy with hiring sales headcount.  But it is so much more than that. Good go-to-market includes a whole ecosystem of activities from defining your market, creating your marketing strategy and determining how to generate leads, to building sales collateral to sales compensation and so on. In other words, a strong product launch strategy is NOT:

-A list of marketing campaigns

-A list of target customers

-Sales headcount

A robust GTM strategy delves into the specifics of what is being sold, to whom it is being sold, and how the sale will be executed. 

When we talk about the ecosystem of go-to-market capabilities to successfully launch a new product, we are focused on five primary areas:

1. Market Understanding - Does the organization understand customer needs by segments and understand the competitive environment? Does the organization have the processes and skills to continually discover new market insights to inform both product and go-to-market strategies?
2. Business Modeling - Can the organization translate market understanding into a compelling business model that includes economically attractive product pricing, product packaging and customer acquisition strategies?
3. Marketing - Can the organization develop compelling messaging, communicate those messages using different marketing channels and generate the volume of leads necessary to meet revenue targets?
4. Sales - Does the organization have a sales channel and sales process that has the skills to sell the new product who are we selling to and how
5. Renewability - Has the organization planned for account growth and product renewability?

Mistake #3: Using the Same Go-to-Market Motions for Products that Have Been Used for Services

Marketing and selling a more productized solution is very different from marketing and selling a customized service. For starters, when you are selling a customized service you are focused on understanding customer needs and then convincing a customer that your organization has the capabilities to meet those needs. Customers are buying the promise that the people will be able to meet their needs. Or, as one Managing Partner described it, “Our clients are buying ‘Yes-as-a-Service.’”

But a service that has been productized has to be positioned as the best packaging of features for a set price to meet the common need of a customer segment. In other words, services are bought, products are sold. 

It is important to acknowledge that many B2B services organizations who are introducing products or productized services are doing so alongside existing services or as part of a bundled solution that includes both services and more productized services/products. That means that this is not as simple as standing up a products go-to-market organization, of which there are many blueprints for how to do that. Launching products alongside solutions is more complex and requires an approach that is different from services GTM and pure products GTM.

New Book - Launch Boldly: How Professional Services Firms Sell and Market New Solutions 

Coming later this Spring, our new book focuses on how B2B professional services firms successfully commercialize new products and services and get to revenue impact fast and efficiently.

What makes this book unique is its emphasis on the particular context of B2B professional services companies. There are not many resources on how to successfully launch new products and even less on how to transform your go-to-market strategy when you are productizing services. For example, guidance on how to price and sell a B2B SaaS product is not very useful to a service company who is often selling products bundled with existing services and primarily through a sales channel of doer-sellers. 

In Launch Boldly, we map out the sequence of activities for bringing new products to market and areas of highest leverage. We’ll answer common questions such as:

1. How do I price and package services and products to minimize the risk of cannibalization?
2. How much exactly should I be investing in sales and marketing? And how does that level of investment vary depending on the stage of the product?
3. How do I manage the inherent misalignment that may exist with legacy services selling motions?
4. What are the most important skills sellers need when selling services bundled with products?
5. How can I increase the renewability of my product when I create my go-to-market strategy?
6. Who exactly is going to be responsible for the go-to-market strategy of new products? Is it the head of product? Is it the CMO if I have one? Is it the head of sales?
   
   
   

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¹  * “Productize” is defined as the adaptation of a service that is delivered one-to-one or one-to-few into a product that can be delivered one-to-many. Product refers to a scalable, often tech-enabled, tool or program that can be packaged and sold to many customers. For example, a more standardized engagement, content (e.g., a unique data set, research report, book), an event (e.g., training course, conference), or software that automates a process or application of an algorithm.