New Offerings: Key Features
We live in a very commercial world, in which technology growth is moving at an ever faster pace. One of the results of this is that the pace at which new products and services are being introduced to the consumer market is breakneck pace but fiercely competitive. As B2B sales is feeding (directly or indirectly) this pressurized market, the need for new offerings to make their place quickly is paramount.
This in turn drives the way now offerings (and by “Offerings”, we mean, products, services or products where there is a service element) are introduced. It is quite likely your new offerings will be deemed a success – or not – within a year or launch and you may well find that a competitor has a “Me, too” in the market a year or two after that. All this forces some clear discipline on the way new offerings are introduced, and what they look like. It is not possible to address every issue here, and there are as many different approaches as there are new offerings. However, since if you contact us to set up an engagement, you are going to have to figure out the answers to some questions, it makes sense to think about them in advance, so here they are:
Impact of Displacement: it is unlikely that your new Offering will be so utterly, completely new that it is addressing a market that simply didn’t exist before. Therefore, it is likely that it will replace something (directly or indirectly). What it replaces may not be obvious, but it will be there. So – am I displacing something that has a well-established brand leader? If so, then expect a very targeted fight, from an entrenched competitor – so your incremental value proposition needs to be very clear in the way your offering is designed; there’s no room for subtlety here. A sub-set of Displacement is the extent to which you will be displacing your own current offerings – referred to in marketspeak as Cannibalization. If so, how does your new offering look next to the current one? If it is a very clear improvement, and can be offered as the same or a similar price, you can expect conversion to be very rapid. See “manufacturing Flexibility” below.
Ease of Use: Making things easy or intuitive to use is a critical component of consumer products (think Apple). It tends to get less consideration for products and services created for B2B. We tend to think our buyers are more sophisticated – smarter, quicker on the uptake. And much of this is probably true. But Apple didn’t get rich by being cheap, and their price points meant that their core customers are exactly those people who are likely to be your buyers and users. If it matters for their phone or their tablet, t matters for the other things they use I their business. They may be smart, but they are certainly time-challenged, so making things simple is valuable. And valuable means attracting a price premium.
Versioning: Also referred to as Tiering, introducing your new products (and services, it applies to services as well) with some component of adaptability is really important to enable it to reach a broader market (see Applicability, below). Some things may by nature be infinitely adjustable, perhaps in more than one axis. Such bespoke adaptability may be very useful, but it offers a lot of choice, and that has potential disadvantages that you should consider carefully. Having any number of options can end up with a “Chinese Menu” syndrome – where it becomes close to impossible to decide how to configure it. Naturally, if part of your value proposition is a design or configuration service, then this makes good sense. But, if not, than consider looking at having a set of versions – and then perhaps, one or two choices in one or two features on each version. How many versions you have, and how they are prices, has as much psychology about it as it does in B2C, and not something to go into here, but whether to version or not is a critical decision. Versions may help simplify manufacturing (or service delivery) as well.
Off Switches: Elsewhere on this website, we make mention of a “first rule of new products” – you can’t charge to turn on something you can’t turn off. If your new offering is fundamentally better in some way, due to its design, then customers will like that, but will very quickly figure out that you cannot help but deliver that benefit to them, whether they pay for it or not, simply by their choosing that new offering. So, think very carefully during the design phase, to see whether you can insert “off” switches which can be activated or not on a case-by-case basis each time your new offering is sold. This is part of the fundamental enabler for versioning, in fact. It is counter-intuitive to engineers, who sometimes expect customer will love whatever it is that they have designed, and will just queue up to pay for it.
Applicability: Any marketing text book will tell you that the better-targetted your product or service, the more successful you will be. This is certainly often true of consumer goods. But B2B is not usually a mass market in the first place, and it can easily happen that a new offering targeted at a niche market, suddenly finds that it is actually a niche within a niche, with a vanishingly small applicability. Therefore, as part of your basic market size assessment, decide whether you can afford to have an offering that is very specific – and think whether it can be designed so that it has slightly broader applicability and can perhaps, meet the needs of two or three different markets, with a few design changes.
Training: If new offerings are not completely intuitive, then some form of training will be required for your customers’ users to familiarize themselves with whatever it is. Training is usually a value-added service to sell, but it is important to take into consideration what this will do to your resources. It is also important to remember that your own customer-facing people will need to learn about the new offering and they will also need to be trained on what it is, how its new features will benefit the customers and how to sell it and run it efficiently and reliably.