In this article, product, service and company are used interchangeably.
BASIC PRINCIPLES OF PRODUCT DEVELOPMENT
There are some principles that should guide product development. Once you’ve learned them, you can explore ways to ensure people pay for those products.
1. Ideas hate to be wasted. If you’re not in the habit of turning them into products, others will deploy the same ideas right in front of you.
2. Your product must meet an intrinsic need or uncover a latent need. Try using the APT model: Anger, Problem, Time.
ANGER: What is the public angry about? How does your product address that anger? The angrier they are, the more willing they are to pay for a solution.
PROBLEM: What problems does your product solve? Does it make life easier for people? Does it remove a burden?
TIME: In this multitasking generation, can your product save people time? Can it help them do several things at once? For example, This is the selling proposition of Hootsuite, the social media scheduler.
3. Your product should address two levels of need, if possible: Functional & Aspirational. Louis Vuitton bags are not just item carriers, they’re also icons and status symbols. Beyond the basic function, what does your product add to the life of the consumer?
4. If possible, can your business help others make money? For instance, Apple provides an ecosystem for App makers to earn income.
5. Try building systems, not just products. Apple built a product (Phone), distribution system (Apple Music) and marketplaces (App Store/Apple Music). A product system is like a toll-gate. Own the value chain or invest along the chain, so you make money at multiple points.
6. To avoid cannibalisation, use distinct brands for different audiences. However, they can be endorsed by the mother brand. For example, Ralph Lauren has a high end Purple Label brand & lower end Chaps brand. Somewhere in the middle is Polo.
7. Never design a product from your perspective. Ask what the customer wants.
INSIGHTS FOR SELLING YOUR PRODUCT
1. Don’t position your product in a way that people think they are doing you a favour. Have self esteem.
2. Sell your product from the perspective of the customers’ needs. Identify with your prospective customer. Get to know them. Speak their language and articulate what they need. For example, you can’t successfully sell to a technology company if you don’t “get” technology.
3. Speak the language of service not profit. Customers can tell if you’re just pushing a product or if you’re there to help.
4. Be enthusiastic. Sell your product like it’s the best thing since sliced bread.
5. Tell stories. Build a legend around your product. The market likes inspirational stories with a sense of history. Sell drama, aspiration & inspiration. Make people feel and want your product.
6. Your product must have character and personality. If it were a person, what would it look like? How would it talk?
7. Use cultural contexts to your advantage. For instance, in Nigeria, use the bandwagon effect. Sell first to influencers in a group. For B2Bs, identify the power structures in the company you’re selling to. Focus the thrust of your product presentation on the decision makers.
8. Place your product for free with people and companies that have high visibility & following. They are your brand ambassadors. Use their testimonials for marketing. For example, if you’re in the fashion industry, place your product on the body of a Nollywood star on the red carpet. If you’re in technology, give a top company a free trial.
9. Make industry insiders your sales agents and pay them commissions. They understand the market and have the respect of their peers.
10. If your product is novel, educate the market. Do short demo videos or speak at events. Position yourself as an industry expert.
11. If you’re an ideas person but shy, partner with a business developer who loves proposals, pitches and sales.
12. Do a test-run of your product first. Sell it to friends or in an online store to get feedback before full deployment.
13. Build critical networks: School associations, professional bodies, churches etc. They are your first customers. Demo your product & speak at their meetings.
14. Be consistent in marketing.
STRUCTURES FOR RETAINING PRODUCT LEADERSHIP
1. Don’t launch a product without ensuring consistent supply. Do not create demand without supply.
2. Never offer more than you have the capacity for. It will hurt your reliability & integrity.
3. To keep your promises when you’re overextended, explore short term collaborative partnerships.
4. Remember that every product that isn’t sold is inventory and cost. Focus on sales.
5. Package your product very well and lay massive claim to it. If a usurper develops a copy, everyone will know they’re the fake and you’re the original.
6. If your expenses consistently outstrip your revenue, your company may fail. (We’ll talk about loss leaders some other time). Always ask, “Who will bear the cost of a new feature? The customer? The investor?” You must pass on your costs to someone.
7. Calculate all costs, including the time you spend thinking and planning. Even when you get supplies for free, add the cost to your budget to get a realistic idea of the price of your product.
8. Be careful about pumping money into a rave-of-the-moment idea. Let an objective outsider with a financial mindset advise you.
9. Generate cash flow. Where will the cash flow come from to sustain your company while you work on a new product? How will you pay salaries? Sort out cash flow first.
10. If you co-develop a product with others, do the legal paperwork before it becomes successful. Partners sometimes forget agreements in the midst of prosperity.
11. Any product that has significant public following has a potential for profit e.g Facebook. Ask, “How can I consistently harness my followership to create value?”
Q: How do you sell your product to a new audience? How do you reach decision makers and industry insiders?
A: There are two ways to sell a product: The market looks for you or you look for the market. (The Pull and Push Models.)
The first strategy positions you as an expert in your field and the top supplier of the best products or services. It requires a focus on branding, PR and testimonials from satisfied customers. You can begin a blog on issues in your sector, voluntarily speak at events or write magazine columns. Become active on social media and comment when issues are being discussed by leading thinkers in your field. Be part of the discussion. Over time, customers will seek you out because they recognise you know what you’re talking about.
In the second option, you become an ace marketer. You use advertisements. You become active within networks, where decision makers are. You volunteer on committees or in high-level non-profits, where the Board Members are business decision makers. Let them notice you through your contributions. Deploy the product you want to sell for free, in those organisations and networks. You’ll get to market your work ethic, product and also impress decision makers.In this article, I will teach you how to turn your ideas into products. Click To Tweet Learn the principles of product development and how to retain product leadership. Click To Tweet