It goes without saying that acquiring new customers for your business is critical to the growth of your company. It is especially true for companies that are launching new products into the market and have not determined an exact formula to grow their customer base. Smaller companies that typically have 1-2 products in their arsenal are at risk if they do not get their customer acquisition strategy right. While there is much collateral available on the strategy of new customer acquisition, implementing that strategy takes a concerted effort within the organization to ensure that new product launches are successful and the target growth rate is achieved. Without the right program in place, knowledge or help from stakeholders, companies often waste precious resources focusing on the wrong elements.
Step 1: Customer Discovery
The primary goal of customer discovery is to test the problem you’re trying to solve and then test the product hypothesis. Many companies call this the “prototyping” phase and is more prevalent in companies that use agile to build their products. Carefully planning out your customer discovery helps:
- The engineering team and the product team extend the product development process by including ways to get direct customer feedback.
- Your marketing organization to understand the customer problems better and start defining the different market segments using the product and the associated value. If done right, engaging the marketing organization in this phase helps them to start thinking in advance the marketing campaign they would like to implement for product launch.
- Determine if the product concept solves biggest problems that customers face. Some people call it a “Minimum Viable Product (MVP)”. This is really important because smart engineers and product professionals want to create the best product that will get the initial customers and then build out as they acquire new customers. MVP is not the ideal product for the ideal customer.
- Cultivate a relationship with early adopters with the product. Let’s face it, it is the early adopters that help you the most because they also understand the risk of adopting new technologies or products. But it behooves you to cultivate a good relationship with them because these are the same customers that will help you during the Launch Product phase. More on that later in the post.
Step 2: Customer Validation
Many people call this the “Beta Launch” or “Signing up beta testers or customers”. The primary difference between the Customer Discovery step and the Customer Validation step is in the goal; the goal of customer validation is to sign up beta customers, but more importantly, find a way to see if your product works in real world scenarios to solve real world problems. Also, during this step, the more serious customers are willing to work with you and help you refine your products. As you work through this step:
- Target the right amount of customers that will help you validate the product and help it make better. It is also important to determine the right types of customers, because these are the same customers that will help you during the Launch Product phase. I know I’ve mentioned this earlier in this post, but bear with me for a couple of minutes. I will explain it a bit more later in the post.
- It is important to start thinking about how you will support your customers. Since the code is still not fully baked, the support structure needs to be a little different. Additionally, as a commercial software vendor, if you find yourself in the lucky situation that customers are willing to use your software for their commercial needs, then it is an opportunity for you to define a different commercial agreement from a fully launched product. In other words, heavy discounting and a little bit more support upfront may help you gain momentum later with your product launch.
- Start engaging your Marketing organization right away. Typically when products are launched, press release are used which include customer testimonials and use cases. However, it is also important to start identifying other collateral that the marketing teams can use for their customer acquisition campaign. Since good marketing collateral is important for potential customers to understand the product’s solution and value, marketing departments can use this phase to determine the kind of collateral they would need. When working with some beta customers, it seems normal to give them a decent discount for being early adopters, but this also gives you the opportunity to include some commercial commitments that to provide you with customer case studies or success/value metrics that could be used in potential white papers or presentations.
Step 3: Launch Your Product
So, now that you’re ready to launch your product, what should you do? In a previous blog post “What should you include in a product launch checklist?“, I had highlighted a product launch checklist using a product like OneHive, but launching your product has other aspects that contribute to your success. The primary goal of launching your product is to showcase the success of your product. And the best way to do so is to have more customers talk about your product and share the value it brings to their businesses. For your product launch to be successful:
- It is important to identify the right customers that will help promote your products. By now, you already have a good pool of customers you choose from your beta customers list, but it is ideal to choose customers whose brands are recognizable, are perhaps thought-leaders or market leaders, influence the market, and perhaps shape opinions of products. So, if you don’t have any such customers in your beta customer list, lean on the marketing department and sales teams to start identifying the opinion shapers and trend setters who may be willing to be part of your product launch.
- It is important to consider giving your launch customers a commercial incentive for being early adopters and willing to bet their business on a brand new product. Which means, it is important to work with the sales teams early on to determine the right incentives and put them in a commercial structure that helps both parties. Thus items like pricing and success metrics need to be predetermined.
- Your Public Relations (PR) and marketing teams need to be involved early in the process. A new product launch gives the company the opportunity to showcase the success of the launch and working early with the PR and marketing teams will help them to think about different ways to launch your product. As part of the commercial structure for new customers, you could request the customer to make some commitments on providing customer testimonials, sharing success stories with others, providing references new customers, and perhaps be part of future panel discussions at industry and trade events on your behalf.
While product launch is a good way to start thinking about the customer acquisition strategy, the work to acquire new customers has just started. And if your product is a little bit more complex than a self-service model where customers can purchase software online, chances are that you require more than just a marketing team to help acquire customers. That’s where inside sales, field sales, and channel sales come into play.
Irrespective of where you work, in a startup or within an enterprise company, launching a new product gives you an excellent vehicle to start defining your customer acquisition strategy and tweaking the approach until you find the right formula that works for your company, your product, and for your customers.