Your customers have been asking for it, as have your sales and marketing people. Your gut says it is time to add product or grow into a new market segment. So is it? Diversification is critical to any business, but it is not without challenges and should not be undertaken without considerable effort and planning. The loss of time and personnel, and the impact on your image that result from branding mistakes can affect your core business. It pays to conduct due diligence on your direct competition as well as your own business’ capabilities and shortfalls, including sales skills and financial ability to handle the launch, introduction and ongoing support. A few rules can help you through this process.
Rule 1
Evaluate your customer base compare this to anticipated customers for the new product/category. Think about your competition and what you can offer differently. What do you bring that will attract customers to your door or website? This is the start of your marketing plan.
Rule 2
Don’t think you are unique. Other providers are selling the same product line. Build your due diligence by leaning heavily on your potential manufacturers for information and referral to noncompeting providers who are similar to you, then interview these providers at length. When did they launch and how much did they invest? How long did it take for them to break even and did they go over their launch budget? If they were launching today, what would they have done differently?
Rule 3
Work with manufacturers that support you in time, money, creativity and information. Marketing support comes in a variety of forms, from marketing development funds (MDFs), display funds, co-op advertising, in-store demos and seminars, sales call ride-alongs, free goods, free web plug-ins and more. Make all requests and get all commitments from the manufacturer in writing.
Rule 4
Write your game plan, which translates into your marketing plan. Map out the timeline, then map out the corresponding financials. Include all investments for the launch, such as website and the cost of critical messaging to the target audience. Typically the biggest underestimation is how much it will cost to engage and keep the target audience.
Rule 5
Put your game plan into a financial pro forma that lays out different revenue/sales scenarios. Throw some pitfalls or potential blind spots into the analysis. Thinking about it beforehand lessens the shock and helps you move more quickly to a realistic recovery and action plan.
Rule 6
Train yourself and your employees. The successful launch of a product or market segment requires knowledge. Ensure that everyone on your staff is trained on the when, why and how of launch, service and follow-up. Their training and knowledge can make a difference in your business growth rate.
Rule 7
The first sale or referral does not beget the second. It takes persistence on your part and being savvy about all the ways to find and develop your customer. Social media has changed this picture. Your first time, small-purchase customer may have a bigger mouth and social presence to help you build your business than that high value customer. They loved what you did to help them or their family, so give them the tools they need to pass along the word.
Rule 8
Soft launch if at all possible to get feedback. You will always hear ways to improve your efforts and it is better to have these beforehand. If your launch involves equipment with new software or apps, beta test all with any willing current customers to avoid potentially serious launch complications.
Rule 9
Don’t let up on marketing after the launch. Within the first four to six months your competitors will react to the pressure of your launch, and you will learn where you need to modify your message, advertising and social media plan, referral outreach, events, services and training. Be prepared to adjust and maintain momentum.
