Whether you work for a tech startup or a large corporation, new product innovation is the lifeblood of your organization. Ben Horowitz writes that "innovation is the core competency for technology companies." Conventional wisdom suggests that you should bring a product to market in three consecutive steps; first build the product, then market the product, and finally sell and support the product. But in this case, as in many others, conventional wisdom is wrong. The problem with this linear approach is that no amount of sales and marketing can makeup for poor product-market fit. Kickstarter has turned the conventional product development process on its head. Kickstarter is a crowdfunding site that allows makers to pre-sell products before they invest the time and money to build them. These pre-sales give the maker valuable product feedback early in the product development cycle. But, what about B2B products? Corporate buyers don’t hang out on Kickstarter. Even if they did, competitive concerns often cause us to keep our product roadmaps close to the vest. So how can B2B companies discover customer needs and gauge demand early in the product development cycle? The answer is through pre-product sales and marketing. If your new product development team doesn’t include sales and marketing, your team is taking a long-distance rifle shot at product-market fit. Here are three ways sales and marketing can help you develop new products which hit the mark:
Cold email your target buyers:
The best way to gauge interest in your new product is to try to sell it. Sending cold emails to your target audience lets you see if your idea is powerful enough to cut through the clutter of your buyers’ inboxes. Email prospecting allows you to do two things: i) test your product hook subject line (measured by open rates) and ii) test your value proposition (measured by response rates). Use LinkedIn, DiscoverOrg, or any other of the readily available data services to get the contact information of your target buyers. Then, load two email templates into an email prospecting tool such as ToutApp. I like to split test the subject line while keeping the body copy the same (hence the two different email templates). Your subject line should be your product hook. Your body copy should explain your value proposition and provide a call-to-action. Asking your buyer for 15-minutes of his time is an excellent CTA as it creates just enough friction to gauge real interest. Your email tool should give you great data on open rates and response rates which you can analyze by industry, job title, and template. This data will give you insights into which message resonates with whom.
Show, don’t tell, your vision:
Now that buyers are responding to your outbound emails, its time to show them your product vision in a 15-minute screen sharing session. It is very important that you visually articulate the product experience to your buyer. In other words, show don’t tell. Of course at this point you don’t have a real product so you need to put together a short animated slide presentation. This can include prototype renderings and screenshot images pieced together into a user storyline. You don’t need pixel perfect designs, you simply need to be able to walk through the storyline without text. Think of your buyer’s questions and commentary on the presentation as market insight gold.
Put a price on it and ask for a commitment:
Dan Ariely, professor of behavioral economics at Duke University, talks about how humans simultaneously live in two different worlds – one where social norms prevail and the other where market norms prevail. We behave very differently according to which norms we are operating under. Ariely uses the example of Thanksgiving dinner to illustrate this phenomenon. Imagine your mom’s reaction if, after enjoying Thanksgiving dinner, you pull out your wallet and ask “how much do I owe you?” She would be offended because you are breaking social norms by trying to put a price on an act of kindness. The same question at a restaurant, however, would be perfectly acceptable because it is consistent with market norms. You may be wondering why I am providing background on social vs. market norms. I do so because we need to make sure our prospective buyers are giving us feedback under market norms instead of social norms. When you ask a person for feedback on a new product they are likely to sugarcoat the feedback to preserve their social relationship with you (even if it is a first meeting). They are operating under social norms. As social animals we have been (mostly) conditioned that it is not in our best interest to offend people the first time we meet them. We are much less likely to do this when we operate according to market norms.
The best way to get feedback under market norms is to put a price on the product and ask your buyer for a commitment. I like to create an exclusive “early access” program where customers commit upfront to buy the product at a slight discount once it is generally available. I ask them to sign a term sheet to join the program. You can make the term sheet risk-free by giving the buyer an option to back out of the commitment at any time if they aren’t satisfied with the product. While the agreement isn’t legally binding, it is a mechanism that will force your buyer to evaluate your product according to market norms. Your buyer’s objections will help you design a better product.
The Amazon Fire Phone is one of the most recent examples of a highly hyped product that failed to achieve product-market fit. Its possible that the product development team never received market norm feedback from consumers. This Amazon Fire Phone video shows consumers providing feedback based upon social norms. They rave about new features such as Dynamic Perspective. The Amazon team would have received market norm feedback had they asked the same people to trade in their iPhone and pay money for the Amazon Fire Phone. The team would have realized that consumers view certain features, such as compatibility with either the Apple or Google app ecosystems, as purchase pre-requisites.
In summary, get market feedback early in your product development cycle through product marketing and pre-sales activities. I think they will quickly surface customer pain points and help you develop an even better product.
What else? How do you get real-world feedback on new product concepts?