20 Jul Developing a Product Around an Unknown Concept
Developing A Product
Imagine trying to explain the value of the transistor radio to the general population back in 1954. How could manufacturers convince consumers that they would meet needs customers weren’t even aware they had? A tough sell, but once it caught on, it changed the world.
Being an innovator always comes with the huge challenge of educating potential investors, developers and end users on the significance of a totally new product or service. When bitcoin hit the market, its leaders struggled to answer the same question: “Why is this necessary?”
Bitcoin shares initially sold at a mere $.003 each, thanks to public unease about this fresh concept. Seven years later, shares are nearing $2,200, according to recent estimates. But many companies find it cost-prohibitive — not to mention painful — to wait so long for their innovations to take hold.
To manage this delicate balance, you must develop and enrich emerging concepts rapidly while executing a smart strategy for educating consumers.
Learning the lessons of others.
In Ladder’s first year, we still hadn’t figured out how to describe ourselves at the highest level: Were we a SaaS platform? An agency powered by technology? An enterprise tech platform with fully managed services? Did it even matter what we called ourselves?
The amount of choice you have as an entrepreneur in a nascent industry is one of the most powerful things in the world — but with more choice comes more guessing, sometimes gut-driven and sometimes data-driven. During those initial 12 months, we attracted users who never would have tried a more traditional service by promoting Ladder as a free self-service SaaS platform, which both helped and hindered our ability to generate new business.
Our sales pipeline, for instance, can be less efficient than those in fully established industries — occasionally, we get “wins” by signing high-touch clients who actually represent a loss in profit because they don’t understand how to use our service. On the other hand, one client using our platform on a free basis reached out for help in implementing the system and is now one of our highest-paying customers.
Realizing that our target customers couldn’t wrap their heads around the concept of not hiring one firm for pay-per-click, another entity to manage social, a freelancer to write their blog posts, and so on, we knew we had to break them out of that mindset. Switching strategies, we worked education into our sales process: Instead of selling our new concept, we leveraged initial user curiosity.
Blazing trails in uncharted landscapes.
When you’re building something new, your mistakes form the blueprints future entrepreneurs will study. If you’re a trailblazer in a novel space, here are four ways to forge ahead.
1. Don’t sell — educate.
Rather than push for conversions, focus on delivering informative content. To rebuild your sales funnel around education, make email acquisition a goal and then drip remarketing emails. Our own process includes writing guest-contributed posts and blogging about everything we do.
YieldStreet, an online alternative investments platform, created YieldStreet University, which combines video content, infographics and other visuals to help simplify complex concepts about alternative investing for its customers. This not only attracts prospects with free, informative and engaging resources, but it also arms the sales team with compelling educational tools.
This strategy requires pushing for deeper funnel conversions, such as sales meetings or product-account conversions, much later in the relationship than you otherwise might. The minute you attract potential customers with a new concept, start a conversation right away.
Take it from Ryan Burke, VP of sales at InVision: He used to schmooze, but he found more success with an education-centric sales process. As Burke explains, “We continue to innovate on how we cater to our target community, and it doesn’t need to always involve product usage.”
2. Slow your roll.
Faster isn’t always better. When you’re dealing with an unknown concept, speed kills the sales process. If your service or product is new to the market, resist the temptation to immediately convert cold traffic. First, take time to make sure your clients or customers understand what they’re working with and how to utilize your product or service to its fullest potential.
If clients want to pay after the first call, we don’t let them. Having encountered this on a pretty regular basis, I now enforce the following protocol: After the introductory conversation, we email documentation reaffirming our discussion. Then, we demonstrate a one-on-one experience of our product, followed up with another email containing a contract agreement. Finally, we set up a one-on-one call to review that agreement.
While slower may be more of a slog, it’s also wiser. If you try to sell to people who aren’t ready to glean maximum value from your product, you’ll end up with frustrated customers who have a lower lifetime value.
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3. Be open about swings and misses.
Yes, transparency is a buzzword — because it’s good business and the best way to help people understand and use your product or service. Honesty builds trust. One study from Label Insight showed 73 percent of participants were willing pay more for more transparent brands.
What do you think the folks at McDonald’s Canada did when a customer asked what was in the Big Mac’s “secret sauce” on the site it had created for curious customers to leave questions? McDonald’s posted a video demonstrating how it was made. If that’s not giving away a trade secret, I don’t know what is. This just goes to show that companies of all sizes, in all industries, benefit from being transparent.
We practice what we preach in this regard by letting clients know when we swing and when we miss, which helps both sides correct false assumptions. Capturing those assumptions in test scripts ahead of time helps ensure you’re all on the same page and testing the right things. We follow the same blueprint of technology, process and methodology that we use for our clients, and we open source that blueprint on our blog.
4. Focus on your mission, not personas.
Don’t concern yourself with selling to anyone in Box X or Box Y. If you do, you’ll end up tailoring your product to suit demographics instead of your vision. Identify your mission and purpose, and sell that — the universal truth of what you can always be counted on to provide, not your product.
You can’t differentiate an unconventional business by lumping it in with others just to be better understood by the market. I don’t sell a product; I sell an idea. Instead of trying to convince people that we are a technology or a services company, I tell them how our mission is to remove guesswork from growth.
The world needs and deserves innovative solutions, but that doesn’t mean it will understand the best ones when they appear on the scene. Your role as an entrepreneur is to overcome skepticism with pragmatic strategies and keep your focus in the whirlwind of building a new market.
originally posted on entrepreneur.com