Are You Too Making a $100M Mistake?

Are You Too Making a $100M Mistake?
I was speaking with a major market research firm that in
the not too-distant past had scuttled an eagerly
anticipated new practice area, claiming that there wasn't a
market for the new practice and associated research. Yet,
a few years later, their biggest competitor has a huge,
booming practice in the same area! The competitor's most
widely-read analyst in the entire firm is (you guessed it!)
writing exclusively about the same practice area that was
scuttled. For the competitor, this is the largest practice
area, generates the greatest volume of reports, and the
greatest revenue. Clearly, their competitor has made a
very successful business in the same market that was deemed
unprofitable and unfit for entry. How could one firm fail
when a fierce competitor succeeds?

From a business perspective it may make sense to scuttle a
project when sales are lackluster and the new product or
service simply isn't gaining traction. Yet, in this case
and with the benefit of 20/20 hindsight and a competitive
outlook, this was exactly the wrong decision. How could
this research firm have made a different (and more
profitable) choice?

In talking with executives, the problems were three-fold.
First, their initial foray into the marketplace was too
general and didn't address specific needs of their customer
base. They didn't spend the time up-front to understand
their customer base well enough and delivered a product
that didn't provide sufficient, immediate and practical
value. Second was a marketing issue. Because this was a
new product, targeted to a different role within existing
customers, marketing should've better equipped their sales
team with the ability to identify the right buyers within
accounts and the right messages to effectively convey the
value of the new product. Third was a sales execution
issue. Because the sales team was uncomfortable and
ill-prepared they gave up prematurely saying, "We can't
figure out who owns this function in the company and so
can't sell this."

This may have been a $100M opportunity that the company
scuttled, whereas if they had spent a bit more time
up-front to find out who & how many will actually buy the
new product and what specifically these prospective buyers
were looking for, they could've avoided this disaster and
saved a huge amount of money.

There are two lessons to be learned from this sad story:
You need to clearly identify prospective purchasers and
spend time with them to clearly understand how your
product/services address Customer Purchase Drivers™.
As I've written elsewhere, customers base their purchase
decisions on the attributes of a product or service that
enable them to do four things:
1. Make more money
2. Reduce costs
3. Mitigate risks
4. Satisfy an emotional need

Only by understanding these Customer Purchase
Drivers™ can you develop products and services that
are guaranteed to be successful in the marketplace. Only
by spending time with customers beforehand can you avoid
making a $100M mistake.

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Curtis N. Bingham, President of The Predictive Consulting
Group, helps organizations dramatically increase customer
acquisition, retention, & profitability. For more
information about his new Customer Experience Audit,
Customer Strategy, or Chief Customer Officers, visit his
website at http://www.predictiveconsulting.com or his blog
at http://www.curtisbingham.com .