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Developing your market attack plan in four steps

14th September 2017

WKI Developing your Market Attack Plan - in four steps New Frontiers

So you’ve completed your market research and analysis. You’ve found a great opportunity to exploit. The solution you have will give you an edge over other approaches and will offer real value to the client. You’ve spent the last couple of months building out the team of advisors and have some friends who’ve agreed to help you with branding, marketing, helping to write a business plan or to get the financials together…

Everything looks great – you’ll definitely need 10 people on board within the next few years to support the €1 million turnover you’ve set as your year three target, especially as you’ll enter foreign markets towards the end of year two. Sound familiar?

But have you created your market attack plan? Have you set out credible steps along the journey that you will need to take to achieve your goals? Over the past few years I’ve coached some of our Phase 2 participants to develop this plan. I use a commercialisation tool developed by WKI to structure the sessions.

WKI Commercialisation methodology

Step 1

We begin by reviewing the participant’s proposed target segments. We also look at the customer profile for each segment (who will use it, who will buy it, how they will use it, what the buy decision is, what motivates the user and what motivates the buyer, etc.). These have been identified by market research conducted to date and have been ranked into an ordered list of segments to target.

Step 2

We then discuss lead customers; these are early adopters who should be willing and eager to try a new idea even if it is in development. You are looking for someone who will collaborate with you to test, suggest, and mould your early stage idea into a customer-ready product for later stage customers.

A question to ask: are the lead customers from our identified target segments? If not, why not? If we can’t get someone from our target segment who will try our solution then has our market research been correct to date? Have we really identified the correct market? It may seem obvious but it does happen that the promoter has profiled a market opportunity in great detail yet introduces clients from different segments without clear reasoning. This can lead to a loss of credibility in the proposal, i.e. does the promoter really know who the customer is?

Step 3

So, having identified the lead customer we next set out what initiatives will be undertaken to advance the idea down the path to market. Each initiative should reflect the stage of development of the solution as well as the commercial roll out. That is why I usually have one or two lead-in steps such as demonstrator stage, prototype stage, before introducing the second and third target segments and beyond moving towards category leadership. Especially when working with start-ups. I also find that the first session specs out the first couple of development steps only. The promoters tend to need a break at this point as for further stages it becomes too vague or harder to define concrete initiatives and measures of success.

Step 4

Profile the risks. All plans have an element of risk associated with them, it is both natural and expected. Stakeholders will want to know that you are aware of potential risks and have prepared a plan to mitigate them should they occur. For early-stage businesses risks associated with technical, market, financial and people should be considered with each stage of the company’s proposed development. These should also be summarised on the market attack plan.

So what? Who cares? Why you?

Let’s work through an example of what a market attack plan may look like:

Stage – Demonstrator Timing: Month 1 & 2

Major initiative:

Update promoter’s LinkedIn profile and purchase premium package for 2 months
Build mock-up demonstrator using MarvelApp, CAD, Animation, etc.
Get 4 – 5 meetings with potential lead customers to review

Measure of success:

2 customers agree to pilot a prototype

Risks:

Unable to secure demonstration meetings

Resources:

In-house resources, travel costs and LinkedIn Premium only

Funded bBy:

Promoter’s funds

Stage – Prototype Timing: Months 3 to 6

Major initiative:

Agree framework for prototype stage with lead customers
Develop working prototype – to agreed limited features/command set
Company formation

Measure of success:

1 – 2 customers agree to purchase
2 – 3 new customers agree to pilot

Risks:

Unable to secure sufficient funding

Resources:

In-house resources and travel costs
Outsourced tech development – €20- 30K

Funded by:

LEO Feasibility Funding / New Frontiers stipend
Innovation voucher – for algorithm generation
Promoter’s funds & friends/angels

Stage – Market Entry Timing: Months 6 to 18

Major initiative:

Secure incubation tenancy
Hire CTO and first in-house developer
Sales and Marketing hires x 2
On-board the first 2 customers
Invest in CRM package
Complete technical development
Attend 1 – 3 national exhibitions and secure speaking slots
Start Next Round funding process

Measure of success:

Customer income secured – €200k
2 – 3 new customers signed each quarter
First segment 2 customers acquired
CE Marking, Safety and Compliance certifications secured

Risks:

Delays on-boarding key hires
Development overruns
Delays securing sufficient funding
New entrants

Resources:

€400K funding requirement (18 months runway)

Funded by:

EI Competitive Start Funding
EI HPSU Funding
Irish VC Funding Delta/Kernel, etc.

Why is this approach important?

There are a number of reasons to use this approach:

For the promoter, it helps break down into manageable steps the road to market entry. It also helps non-financial founders align the sales and marketing, operations and financial requirements of the business for stage of development – which is great when producing three year cash flow projections.
For team members, it provides them with clarity as to what the outcome from each stage of development is. It can also help them see where the business is headed.
For the business plan reader, it summarises what resources are required at each stage and what the output will be in terms of headcount (support agency focus) or monetary gains (investor focus).

So give it a go. You’ll be surprised how easy it can be and what a difference this simple tool can make to developing your company’s market entry strategy.

About the author

Garrett Duffy

Garrett is the New Frontiers Programme Manager at Dundalk Institute of Technology, and a WKI Certified Coach. He has a background in engineering and has lectured in information systems, computer applications and new venture creation. He has been the Enterprise Development Manager at DkIT’s Regional Development Centre since 2007… [Read Garrett’s profile]

The entrepreneurial rollercoaster

The chance to create something from nothing, to see an idea in your head develop and work, either in the form of a new service or new product, is incredibly motivating and, when successful, enormously satisfying. “I did it my way” as the song goes. This is the entrepreneurial rollercoaster of business startups. Managing these emotions is important if we want to banish doubt and remain upbeat, confident and committed to our project.

Managing the bad days

While in the set-up stage of my first venture, a tourism business, a very well respected and established player in the market from Sligo declared that he would ‘eat his hat’ if my business worked in Co Laois! This was at my first trade fair in Germany and, for a 23 year old, this was massively undermining and stuck with me.

We need a coat of armor to protect us on bad days like this or to silence natural self-doubt and banish the demons. Luckily, this coat of armor can be built by using solid ‘good business practice’ at the earliest stage in the venture.

The well-known business writer, Joan Margeratta, ventured that you can distil any business down to two key foundational elements – value proposition and channel to market. This rings true in my experience. Yes, there are many other elements that we need and will need in time, but, to start with, these two elements are critical. Properly validated, they constitute solid business practice that will give you confidence and ensure you are more likely to succeed. It is also something that investors will demand if you are seeking finance pre- revenue.

Value proposition and channel to market

The best way for me to explain what I think is required in terms of validating a value proposition and a channel to market is through explaining the process I went through in developing and bringing to market a new domestic kitchen vacuum – Sweepovac.

By way of context, it took a subsequent four years of product development and market entry to get initial traction. That’s four years of uncertainty, challenges and obstacles. I definitely needed a thick coat of armor to get me through this, to give me the conviction to persevere!

Validation

This validation process was simple common sense really. First, we created the cheapest simplest prototype version possible of something that looked and acted like the finished product. We then tested it on end users – homeowners. We set up with this prototype for 3 days in 3 different retail settings – a hardware shop, a kitchen showroom and an electrical retailer spread across rural and urban centers. Over the three days we surveyed 100 people with a 15 question form using a Likert scale. This showed that 87% of people were positive and liked the product. A critical takeaway was, however, that within this group of 17% who absolutely ‘got it’ and were very enthusiastic, 13% had no interest.

Channel to market

Next, I needed to test the channel to market to see if we could deliver the product in the right retail environment, at the right price and at the right time.

I interviewed 20 kitchen retailers, some with retail chains, and the three largest distributors to these retailers. For each group, I had a different questionnaire that set out to establish their interest, their willingness to take on the proposed product and their views on pricing and margin structure.

The results showed that 70% would display, but with varying levels of enthusiasm and that the expected price should be between €90 and €220.

The result

I drew two key conclusions. The first was that 17%, and possibly more, of kitchen buyers would potentially purchase the product if it was presented in the right retail environment, at the right price and at the right time. The second was that there was enough interest among retailers and distributors to ensure that we could present it in the right environment at the right time. I also had strong guidance that I needed to get the manufacturing price down based on the feedback on the retail prices.

Key takeaway

Attempting to launch a new startup is usually, if not always, high risk with dramatic ups and downs. My key message is this: early and solid validation of your value proposition and your channel to market gives you a far greater chance of success and a coat of armour to help weather the process. It will allow you to focus on delivering, on problem solving and help stop you doubting the road you have chosen or second guessing yourself.

It takes bravery to launch a new start up or transform an existing business, it is usually if not always high risk with dramatic ups and downs. Mentoring has given me a wonderful opportunity to meet great people, to learn, to share and to to be part of their journey.

With regards to the gentleman from Sligo, I never had the opportunity to present him with his hat and some salt. The tourism business ran successfully for 13 years, was sold as a going concern in 2005 and still operates today.

About the author

Henry Fingleton

Henry Fingleton is an Enterprise Ireland mentor and the founder of Sweepovac. In total, he is responsible for six startup companies, which has given him a thorough understanding of the entrepreneurial process. This insight helps him develop and apply appropriate business strategies… [Read Henry’s profile]

Why strategy?

The starting point for a lot of organisations is that people are too busy working away at an operational level making day-to-day things happen. Sometimes, people think they have a common understanding of where the organisation is going, but often – with some probing – it becomes clear that they don’t. Often, ideas about what the organisation might do to support growth are floating around and are either not acted upon at all, or are acted on in an ad hoc way, depending on the forcefulness of the originator of the idea. The development of a proper strategy has the effect of facilitating a common understanding of where the organisation is going, how it’s going to get there and what goals and action are required to make that happen. A lovely analogy I’ve seen is that of a magnet lining all the iron filings up to point in the same direction.

There are various schools of thought on how important goal-setting is in achieving results. Some argue that if you have a strong vision, everything else will fall into place; others, to varying degrees, argue for the necessity of setting goals and developing action plans to deliver those goals. While I’ve no doubt that people have achieved amazing things through vision alone, setting goals and developing action plans generally provides focus and yields better and faster results.

What do you want?

Consider how you would answer the following questions:

What’s your organisation’s VISION?
That is, what change do you want to see in the world?
What’s your MISSION?
In other words, what is your role in that change?
What’s your TOP LEVEL GOAL?
What is your more specific, measurable, time-bound goal?
What STRATEGY are you going to pursue to deliver on that mission?
What strategic objectives will you set to support that overall strategy? What actions are necessary and when? Who else needs to be involved? How will you measure success?

What’s important to you?

But before embarking on any of this, it’s important to ensure that what you’re setting out to do is in harmony with your values.

Values are principles, standards or qualities we hold to be important. Those cited frequently include integrity, innovation, and family… however, there are a whole host of possibilities, for example: money, success, freedom and loyalty. There is no point in pursuing a mission or goal that conflicts with your organisational values as, eventually, something will give, so it is very important to spend some time identifying values upfront. For example, if conservation or environmental protection is a priority for your organisation, then pursuing goals that conflict with these will not sit well and is unlikely to be successful.

How to build a strategy – the process

Once you’ve defined your values, you can work your way through the process shown, determining your vision and your mission, as defined above. For example, your vision may be that the expected standard of coffee in Ireland would be the same as that in New Zealand and your mission may be to be recognised as the best local cafe(s) in Ireland. Then, it helps to step back and do some analysis, both of the context and of your organisation. What’s the environment like? What forces are at play? What are the key success factors for the industry? How well do you perform versus your competitors? A gap analysis will highlight the knowledge, skills and resources that will help you get from A to B, but also the constraints within which you may have to operate.

There are some great tools to help analysis and understanding of your organisation, for example, a simple SWOT analysis, Osterwalder’s Business Model Canvas, and the ‘Prevailing Logic’ tool.

Next, step back again and take some time to generate some ideas for possible goals and actions that will help you achieve your mission. Again, there are lots of possible approaches, but good old-fashioned brainstorming with a pen and some post-its is still very effective.

It’s now time to define your top level goal – what’s a time-bound, measurable goal you can set yourself in pursuit of your mission? For example, you may decide that you will open your first cafe in Dublin in one year’s time, or that you will have X cafes with a specific profit in 3 years’ time. What’s your strategy to get there – i.e. how are you going to get there? Set yourself five or six smaller strategic objectives – they might be concerned with finance, sourcing of premises, hiring good staff, barista training, roasting training, sourcing of equipment, sourcing of beans – the key is that they, together, will deliver your top level goal and that they are measurable and time-bound.

This is also the time to agree on what you’re NOT going to do. There may well be fantastic ideas generated at the brainstorming phase that have to be parked – the team will have to prioritise and agree what is feasible within agreed resource constraints; what needs to be increased, reduced and eliminated in order to create. No organisation has infinite resources and in order to effectively pursue agreed strategic objectives, it is essential that resources do not get pulled six months down the line to work on someone’s latest hobby horse. Unless, of course, there is an agreed change in strategy.

Action plan

Referring back to the ideas generated during your brainstorming, define the actions necessary to deliver on each of your 5-6 Strategic Objectives. You can download a template to help you organise the action items under each strategic objective from my website. What’s important is that you have the resources to pursue the actions and that you set yourself targets and milestones. It’s also advisable to decide on a small number of KPIs (Key Performance Indicators) that measure how well you’re doing on a month-by-month basis. The downloadable template can be used as a live document to track progress and KPIs.

It’s worth spending a bit of time at this stage considering the risks to your plan and working out some contingency plans.

Review

As many have said before me, “…the only sure thing is change,” so there’s nothing surer than the fact that your plan will require adapting at some stage. In fact, being flexible and being able to respond to changing circumstances is a strength, so periodic review of your plan is important, not just to ensure that you are on track but to ensure that what you’re pursuing and what you’re doing are still relevant.

New Frontiers -Business strategy process - Mary Carroll

Maintaining action

The biggest challenge many organisations face is implementation. All too often, they get sucked back into spending all their time on day-to-day operational issues. Dedicating the required resources, accountability and periodic review of the strategic action plan is absolutely critical – otherwise the strategy document will just gather dust on a shelf.

One of the big advantages of determining your mission, setting strategic objectives and detailing an action plan is that all actions should lead back to your mission. Having an action plan allows you to question whether what you’re doing right now is going to bring you closer to your mission. If not, why are you doing it?

About the author

Mary Carroll New Frontiers

Mary Carroll

Mary Carroll is a business strategist and coach with over 25 years’ experience in design engineering, management consulting and business development. She is also an Enterprise Ireland mentor… [Read Mary’s profile]

Maintain a healthy balance

Some business owners (and I was of this frame of mind for a while) think that business expansion is not going to affect their family life, their health, or their personal finances; and that they can be separated from the ongoing pressures of growing the business. Well, I have found that this is definitely not the case! One major change I have made in recent times is to safeguard myself against poor health by getting regular exercise, eating well and spending quality time (vs. quantity time) with family members. This is as important as anything else.

Prepare the whole team for growth

Business growth and expansion brings pressures to your daily systems, and your current structure and team may not have had the time or experience to get geared up for increased production or services due to a sudden growth in demand for your product. Our team had to increase production rapidly to cope with the influx of new sales over a short period of time. Luckily, we were prepared for this potential growth from the beginning and had production capacity schedules to call on and put into action. The team were motivated to deal with this quick growth and it was all hands on deck!

Keep an eye on cash flow

Cash flow is critical to successful expansion, as new timings of payables and receivables can cause financial strain. When expanding and increasing production, it is really important that the daily cash flow is strictly monitored to insure that your company can maintain its daily out. Cash is king – we’ve all heard this saying and it is more true today than ever before, especially for a small business expanding. A healthy profit may look nice on your financial statements, but if capital expenditures or extending credit terms are draining your cash, you won’t be able to stay in business for long. Too often, small business owners fail to focus enough on cash flow generation. For small businesses, handling business accounting and taxes may be within the capabilities of the business owners, but professional help is usually a good idea. Getting assistance with managing cash and the bookkeeping can allow you to excel when others are calling it quits.

Think about customer service

When focusing on growth and rushing to meet a rise in demand, customer service can sometimes slip. As a company who prides itself on customer service levels it was crucial that we ensured the continuing level of service to our loyal customers whilst bringing new customers on board. Smartphones, social media, texting, email, Twitter and other communication channels are making it easy for businesses and individuals to get their messages out. Figuring out the right marketing channels is key for businesses to be successful in the future. These channels are equally valuable when it comes to customer service.

We quickly identified that our key customers were avid users of Twitter and Instagram. By running polls and asking for feedback from our followers, we were able to identify what new aspects of our existing products these customers wanted. Identifying what our customers want and doing a better job of giving it to them has made all the difference in our expansion and planning for the future.

Take employees with you

Employees can become uneasy about change. From the beginning of our business, we shared our vision of growth with our employees. We stirred in them the passion for growth and productivity that we needed to push forward and develop our products. We identified and made the need for change well-known throughout the business. We also facilitated ownership of this change by involving employees in the planning and implementation processes. We encouraged them to offer suggestions of solutions to problems that arose from our scaling activities. We gave genuine regard to the concerns of our employees, and we put procedures in place to monitor the effects of change.

There’s no one way to scale a business, but by ensuring you have the right vision and culture in place, backed by strong procedures, you’ll give yourself the best chance of success. Strong leadership is important, but so it taking your team and your customer base along with you. Our business is growing and, as a team, so are we!

About the author

Noreen Doyle

Noreen Doyle is a New Frontiers past participant, and the co-founder and CEO of Irish Biltong Co. The company produces an award-winning, 100% Irish, gourmet beef snack that is a favourite of sportspeople and nutrition experts around the country… [Read Noreen’s profile]

Getting on television

I’ve also been able to get some appearances on TV, which has been incredibly helpful to the brand. My daughter and I appeared on a few slots on Ireland Am, and then on RTE’s Today. Often, openings like these are down to luck, and being in the right place at the right time. However, it’s also about creating these opportunities and putting yourself out there. In my case, the RTE appearance came about because I was producing online content for the RTE Food website. We were filming a video for this, which the Today show producer saw, and he asked if I would come to Cork to cook on the show.

Being on TV wasn’t something I had ever thought about, or in fact wanted to do, but when it can drive traffic to your website you soon lose the nerves! Becoming an expert in a particular area means that you have to be confident when speaking about the topic. Contact the media and let them know that you are prepared to write about your subject area, or go on TV. Don’t be shy!

Blogging and content partnerships

I started writing blog posts about weaning and feeding young children, and we also started writing recipes. I saw an opportunity to share our content with other online content sites, so we partnered with media providers as a way to grow our brand without a huge marketing spend. I used my network to get an introduction to the content editor of RTE, and because she could see that we were already producing great content, she gave us a weekly slot on their website. They get our content, and in exchange we get links back to the website. We have nurtured similar partnerships with Xposé Parenting, MyDealDoc, SuperValu, MummyPages and GloHealth. We also recently took part in the Tesco Back to School campaign – creating recipes and food hacks for parents.

Increasing awareness of our brand does not lead to instant sales, and it has possibly been a slower road for us than if we had invested in direct marketing. But our hard work is now paying off, as we’ve been able to see with our recent food flask product launch… mums who had previously purchased from us or connected through our recipes have been buying this new product because they trust the brand. Sales since January have been really strong and we are now planning to launch other colours.

Engaging social media content

Social media is another place where you can build your reputation, and once again it’s about producing good quality content that’s helpful and raises awareness of your product. Here too, brand image is important, so on social media we pay attention to our message, language and image. We keep the way we write content consistent across Facebook, Twitter and Instagram. Each post is friendly and helpful and I always sign it myself. Because I’m a mum of two young children, customers know that I’ve experienced the same issues around weaning and food as they have, and that helps to build trust.

I get emails every day from other mums asking if I can help them. Obviously, I’m not a doctor, so it’s important to seek professional advice from a doctor or dietitian if the problem persists. However, there are tactics and improvements I can share with them that can help. Simple things, like asking someone else to feed the child so that they don’t pick up on mum’s stress, can have a huge impact. Sharing these insights with other mums is an important part of what our brand is about, and it’s a great way to build our community of loyal fans.

Our next step is creating videos to get our message out there and drive product sales. This has been a difficult step, mostly down to cost. We’ve been focusing on growing organically, and we don’t have a large marketing budget to call on. At first, we went for a budget option, but the videos weren’t really in line with our expectations. It’s crucial when you’re building brand reputation in this way that everything fits with the image you are creating, so I’m always thinking about the overall brand experience. We were recommended another video producer, and although this time the cost was higher, we’re really happy with the results. We’ve created a series of recipe videos that back up our core messaging about weaning and show how useful our products are. These will be great for brand awareness, and we can share them with our media partners.

Choose opportunities carefully

Becoming an expert and raising awareness is as much about what you don’t do as anything else. For instance, I was asked to become a brand ambassador for a company that had had some very bad press. While I would have been well paid for it, I knew that there wouldn’t have been any positives for the brand image I had spent a long time building, and luckily I declined. Listen to your gut and if it feels wrong, don’t do it!

Also, be careful not to associate yourself with too many brands. Make sure the companies you partner with are a good fit in terms of their ethos as well as their relevance to what you do. You should also consider whether they want to partner with you because they are thinking about moving into your space in the future – in these cases there’s no point you giving them a boost just so that they can take over your market share!

Obviously, some partnerships come with financial compensation, and some don’t… so when doing any free promotion for other brands, think about how you will be able to build on it for the benefit of your own brand. For instance, I’ve done talks at baby & toddler events, which I’m happy to do for free because I’m able to present my products to an interested audience, and the organisers also promote our business on social media.

It’s all a case of balance. Although I do events for free, it is important to make sure you are getting enough back – for instance, that the audience is large enough and you will get good PR from it. In the past, I wasn’t always as cautious. I agreed to do one event on the basis that there would be lots of people attending and I was likely to make plenty of sales. I interrupted a family holiday to travel to the event, only to find that just four people had turned up.

Becoming an expert in your field is about looking for, and being open to, opportunities to talk about your expert topic and share your experiences. You’ll need to work on your confidence and be prepared to put yourself out there, of course! And the other key element is to consider any channel, and balance any offers you get, to make sure the opportunity is of benefit to your brand.

About the author

Siobhan Berry

Siobhan is a New Frontiers alumna and the founder of Mummy Cooks. Her startup has developed a range of storage solutions to help with weaning, and provides practical and simple feeding advice and recipes for the parents of young children… [Read Siobhan’s profile]

Creating the right image through pricing

Pricing affects profit, but it also plays a major role in forming your brand’s image. Set your prices too high and you will be perceived as not offering good value for money, set prices too low and you may be perceived as cheap. The basic starting point for setting prices is an understanding of costs – you cannot sell your goods or services for less than the cost of production, at least not for very long.

Costs of production include the direct costs of each item of product or hour of service – such as raw materials and wages – but they also include longer term and indirect costs, such as rent and electricity. An element of profit should also be included as a cost when considering price. No one wants to be in business to just break even.

Looking at costs will give you a floor price below which you should not sell. It is better to do no business at all than to have a loss-making business. Up to this point in the process, pricing is a science dependent on good and accurate information about costs; the next steps are an art requiring judgement about how the market will react to your pricing decisions.

The context for your pricing

The next step for most businesses is to look at the competition and see what they are charging. Most small and new businesses see themselves as price takers. That is, they must charge what the market dictates. This may be true in some cases, but most small or new businesses should be able to use their greater flexibility to position themselves to charge a premium price.

This will depend on the product or service being sold. Every buyer wants the cheapest price when it comes to buying a commodity item (something that is the same no matter where you buy it), but not every item is a commodity.

Everyone wants the cheapest sofa, but no one wants to get their hair done by the cheapest hairdresser in town. How do you know which hairdresser is best? Well, it is probably not the cheapest. The price a supplier charges sends out a strong signal about the quality of the goods or services supplied. There are many areas where buyers want the best they can afford – no one wants the second-best lawyer, for example. And even looking at sofas, people want quality at a price, not just the cheapest on the market.

Charging an adequate price

Charging an adequate price also allows a supplier to pay for a good after-sales or support service, thus reinforcing the quality perception. Where a sale is made at a break-even cost, there is no room to deal with any customer queries that may arise after the sale. The idea that price sends a signal about the quality of the goods or services being offered should be included in every business’s approach to price setting. No business wants to be perceived as expensive, but being seen as cheap is also damaging.

Each business must balance the too-expensive v too-cheap seesaw for themselves, but it helps to understand the needs of your own business. In approaching the issue of price, a business needs to understand its own limiting constraints. It is all very well to charge as low a price as possible if you can increase your output almost infinitely at little or no cost, such as may be possible with a software product or if you have a large number of air plane seats to fill.

Many businesses, however, have staffing, premises or other constraints to resolve before they can increase production; for businesses in this position, increased pricing may allow them to grow profits working within existing constraints.

As a last idea to consider we have the supply versus demand curve beloved of economists. On the left hand side – where the price is low – there are lots of buyers, but nobody wants to sell. On the right hand side – where the price is high – everybody wants to sell, but there are not many buyers. In the theory, the equilibrium point at the middle is where buyers and sellers meet.

Price v quality New Frontiers Supply Demand

For a small or new business, this diagram shows something else: that there are a small number of buyers who are willing to pay a premium price. There can be profit in addressing these buyers, offering them a reason why they should buy from you rather than at the market price. This may be a better service, branded product or simply a higher price.

Key considerations for pricing

Costs set a floor for pricing
Pricing sends a message
Know your own business constraints
There are premium buyers out there

To illustrate these ideas more fully, I thought it would be helpful to share a case study. The names are changed and some of the details reflect experience with more than one business, but the case study does fairly reflect actual events.

Case study: setting pricing for a quality systems company

The problem

Jason had a quality systems design implementation and training business. Jason himself is highly qualified and very experienced in designing and implementing quality systems within a specialised area. His business employed himself and three other people: Jason as a consultant, two associates and an admin person.

Jason would hold an initial meeting with clients and design a solution to meet their requirements. One of his associates would then implement Jason’s design.

Jason was working 70+ hours per week and feeling overwhelmed when he came to me. The obvious first question was: why not hire more staff? Jason felt that what he needed was another consultant at his level, but that the cost would be considerable and the extra income would not be all that much, as a new employee could not be expected to do the 70 hour weeks that Jason was doing.

While expanding the staff was considered as desirable in the medium term, some change was needed in the short term. We looked at the company’s income. Jason was charging 50 hours per week to clients and his two associates were charging nearly 40 hours each. Clearly, there was a limiting constraint in terms of available hours.

The analysis

I suggested that a fresh look at pricing was needed. The business was profitable, though not as profitable as it should have been. Due to the long hours worked at the operations end of the business, very little attention was being paid to cost control. Any issue that arose was solved by throwing money at it.

We looked at the other suppliers that Jason was in competition with. The market involved one major company with about 25% of the market and a number of smaller businesses similar to Jason’s, none with more than 5% market share. Their pricing was opaque, none had a published set of daily rates as they all priced each job individually.

We then looked at Jason’s customers. They were all strong businesses in an expansion phase looking to beef-up their quality controls. I suggested to Jason that they were all potentially premium customers, willing to pay a good price if they were convinced that Jason could deliver a better service than his competitors.

The solution

As a result of this review, Jason increased his rates by 50%. While this certainly increased profits, Jason considered that that was not the most important benefit. The additional revenue allowed him to hire a second consultant and a third associate. He is now working 50 hours, rather than 70 hours, per week himself and devoting his energies to developing the business – with a lot less time taken up in firefighting.

Although Jason did loose some customers, he has a much better relationship with the customers he retained and he has seen no slowdown in new enquires or new business. The increased level of service that Jason can provide to his customers allows him to pitch his company as the best in the business, effectively being seen as the premium supplier with the major company seen as the bulk supplier.

About the author

Patrick O Flaherty

Patrick is a business consultant and Enterprise Ireland mentor. His expertise spans areas such as financing and funding, as well as business development and internal structures and processes – with a particular focus on projections, business plans, costings and pricing… [Read Patrick’s profile]

Some common mistakes best avoided

Rushing in and not carrying out adequate market research and planning from a quality perspective
Underestimating the cost of go-to-market and in-country activities e.g. number of meetings, travel, accommodation, etc.
Underestimating the timelines required to achieve success – leading to frustration & impatience
Assuming the length of your product, solution or service sales cycle will be the same as that experienced in Ireland
Not being cognoscente of the subtle cultural differences and buying behaviours, patterns and preferences
Spreading yourself thin by attempting to cover too much geography too soon – this is very common mistake; travelling to a meeting from Dublin to Galway is not the same as travelling between, for instance, Bristol and Norwich

In order to provide you and your organization with the best chance of success in your UK target market, there are key considerations and activities that must be taken on board prior to, during and after market entry. As many of you will be aware from day-to-day experience, getting domestic business decisions wrong or merely misjudging them can prove costly. This experience will be amplified significantly in the UK.

Therefore, a well thought out market entry and market activation plan is essential.

Think before you leap

Some organizations enter new markets and pursue a large contract or opportunity based on a loose strategy commonly referred to as ‘gut feel’. Over the years, I’ve heard many explanations of UK market entry decisions – based on what can only be termed as misguided assumptions, such as:

“We’ve grown our business in a small market like Ireland, so imagine what we can do in the UK.”

“Let’s open an office and see how we get on. Sure how difficult can it be?”

“They speak the same language and we are only an hour away by plane.”

“We have been looking after one customer in Leicester so let’s get over there and sign the rest of them up.”

This type of logic would never be entertained if it was the US, China or mainland Europe that was under consideration – so the strong advice is to adopt the same mindset when looking at our nearer neighbour.

Evaluate, activate, execute

This three step approach ensures you challenge your beliefs and try find answers to important questions that will help to support you before, during and after market entry…

Market evaluation

Have you:

assessed the overall market opportunity and size, defining your specific target market(s) by sector, region, company, etc.?
decided on the level of resources required to maximize the market opportunity?
developed a clear and compelling value proposition?
identified your ideal customer across selected criteria?
gained a clear understanding of your buyer behaviour and expected sales cycle?
decided on where and how you need to differentiate against the competition?
considered the most effective channels to promote and sell to your ideal customer?

Market activation

Have you:

created a sales delivery plan with clear accountability and ownership?
introduced key performance metrics and milestone management?
adopted the most appropriate market awareness campaign?
aligned internal sales, marketing and product team(s)?
introduced a sales and pipeline management process?
successfully recruited and on-boarded UK sales or partner representation?

Market execution and management

Are you:

actively reviewing and monitoring sales progress?
constantly driving the critical few activities?
being effective with the remote management of UK employees and partners?
expanding your customer/partner base?
planning for the next growth phase?

The above are far from exhaustive lists of considerations, however hopefully some of the content and tips will prove helpful and be of some value to any organization with an eye on the UK – or any overseas market for that matter. As they say, the only source of knowledge is experience and I am happy to have shared some of mine.

About the author

Barry Moylan

Barry is an Enterprise Ireland mentor and the co-founder and Director of Dublin-based Sales Transitions Ltd. With 25 years’ experience in sales, leadership and executive coaching, Barry works with companies of all sizes to deliver strategic and operational sales growth… [Read Barry’s profile]

The international growth ‘toolkit’

Startups today have to think in terms of international growth pretty much from day one. However, it involves a very different set of skills than the one it takes to achieve the first beta customer in your own market – skills more aligned to scaling growth, and managing customers and intermediaries at a distance. We’ll look at how to achieve those first international customers and then how to consider the major intermediaries – agents, wholesalers, and resellers – that you might take on and looking out for key differences and watchpoints for your international growth strategy.

Startups today are growth-oriented, and it helps your vision and investment narrative to be so. However, it is useful to look at some scaling international companies to see some of the effects that international growth has had on their product/service offering.

The US example

Looking at US companies, language is an interesting issue. For their home markets (which remember, might be a state such as California with ~38 million people), a common English language allows them to scale to much larger markets than a European or Asian equivalent. When they do start to internationalise, they manage their UX very carefully (for instance, by using symbols and pictures such as an envelope to indicate mailbox, or an avatar to represent personal settings). This leads them to think about customer onboarding, which might involve the delivery of online training and certification, like the Salesforce University.

Looking again to the US for a lead in this subject, we can look at large urban regions as proxies for our international efforts. If a startup operates in the Los Angeles area, they have a population equivalent to the Netherlands and Belgium within two hours, or in the New York region, a population equivalent to the UK within three hours. Think in these city terms as you internationalise in Europe. The UK is too broad a target to have as a vision, try a market entry point such as Manchester/Liverpool or Newcastle/Edinburgh – two regions with populations (i.e. a market) the size of about 5 Million people. This gives you an accessible target to aim for.

Understanding and managing your network

Internationalising will offer you many options to scale your customer acquisition, from agents, wholesalers, distributors, and resellers. All good options, if you appreciate the differences between them and manage them as tightly as you would your first customer. Essentially, their roles can be defined as follows:

Agents – they will act on your behalf and get a margin of the sale
Wholesalers – they will buy your product and sell it on to their network
Distributors – they will move your product to customers but won’t buy your product off you in advance
Resellers – they will have authority to act for themselves, selling your product directly and passing a margin back to you

As you can see, there are significant differences in who owns the product, who tracks the cashflows and who owns the actual customer.

Filling the gaps in your knowledge

Finally, it is worth noting that doing or operating business internationally exposes you to risks that are not that easy to ignore, such as different legal codes, local practices and competitive bidding that you might not be used to. It is hoped that you probably do achieve early market adoption in your home market, allowing you to somewhat perfect your product-market fit, achieve seed funding and get good legal, corporate finance and taxation advisors with good experience in international markets.

In technical sales, enterprise sales and equivalent, international sales also means a harder-to-reach customer in terms of training, development, the understanding of their actual usage and remoteness from up- and cross-selling. On the other hand, international sales means that you are able to compete with local players in the market, suggesting you have a defendable and sustainable USP.

Remember though, that internationalisation is not a goal in itself for your startup – it is a process that needs to be managed, in the same way as marketing or product development, so that you can build value for your customers, your investors, and your team.

About the author

Alan Costello

Alan is a business development consultant, and a mentor and trainer for Enterprise Ireland and the New Frontiers programme. Alan’s company, Ruby Consulting, specialises in services such as strategy & innovation, marketing & key sales support, investment finance, social enterprise and community development… [Read Alan’s profile]

Who is organising the event?

The success of the show depends primarily on the footfall over the duration of the event and the footfall is the responsibility of the organiser. A good trade show organiser should provide extensive pre-event publicity with newspaper advertisements, direct mailings, billboard advertising, brochures or emails to previous year’s visitors and exhibitors, well in advance of the event.

The onus is on you to choose a trade show that will have a large relevant attendance.

Checking the credentials of the organiser is a must.

Have they organised the event before?
How many people attended and how many exhibitors?
Have the numbers increased over the past three years (indicative of a successful show)?
Ask for access to profiles of the companies that attended and those of the visitors
Is there an entrance fee?
Will you be allocated free tickets for your customers?
Is the trade show easy to get to?
Is there adequate parking?

Get in early

Once you have decided to exhibit – book early to ensure that you have a good choice of stands. The location of your stand can make a big difference to your floor traffic. Always try to choose a high-traffic location. A corner booth should be your goal, as it will be visible from all possible approach angles. The front of the hall is terrific; the centre of the hall is just as good. Other prime locations are those near major aisle intersections, coffee stations and meeting points.

Plan your show

If the exhibition is a national trade show, you should focus your efforts on your brand or company identification. If it is a consumer show then concentrate on product identification, ensuring visitors remember your products when they leave.

Have clear objectives

Increased sales of existing products or services
Launch of a new product
Carry out market research into client/product acceptability
Network with other exhibiting businesses
Make useful contacts with the media or suppliers
Establish a better profile for the business
Talk to existing customers
Identify additional products or services for your company to supply
To be everywhere your competition is

Plan your stand layout

You can make a lasting impression with a display of any size, just make sure that the impression made is a positive one. Whether you use posters or banners, your company name, logo or the name of your most recognized product should be highly visible. Use large fonts and hang displays as high up as possible. Colourful graphics make maximum visual impact.

Photographs of people using your product attract a lot of attention. Keep text to a minimum; specific details are for brochures. Graphics will attract visitors to your stand, your supporting documentation will give them all the details. Light up products and graphics to make them stand out more. Invest in a display system that gives you a professional look. Curtain backdrops and draped tables can look cheap and make you look less professional.

Don’t clutter or create barriers to your display with too much product, literature, or too many freebies. Present your brochures in stands rather than leaving them lying flat. Avoid putting a table at the front of your stand. Make your display area open and inviting. Save money and add value to your brochures, freebies, and samples by saving them for those genuinely interested in your product or service.

Try to engage visitors to your stand. Just leaving stuff out for people to take away often means they won’t remember you or your company when they get back to base.

Control your costs

It’s never too early to start controlling costs. If you will be doing a number of shows then choose displays which can be used many times over, are easy to assemble and dismantle, and can be transported easily. Having customised shipping containers made can dramatically extend the life-cycle of exhibits, as they offer proper protection during shipment.

Compile a checklist of all items you need to bring along. Having to source replacements for things left behind (mains adapters, etc.) can be costly and may reduce the impact of your stand. Make sure whatever power, air or water requirements your exhibits need are provided by the exhibition organisers. It may be cheaper for you to bring along your own compressors, etc., than hire locally.

If you intend giving away freebies, it is always useful to contact corporate gift specialists exhibiting with you at the show. They may be offering discounts to fellow exhibitors which you could avail of.

Consider sharing the cost of the stand with non-competing peers. For example; a florist may team up with a photographer and a bridal-wear boutique. Visitors may require all or some of their services, it also means there is somebody manning the stand at all times. It is important that each party is aware of any promotions that the other is offering during the show.

Plan your pre-show publicity

Make sure you let your current customers, prospects and suppliers know that you are exhibiting at the show. Send them invitations.

If you are offering discounts for attendees at the show, make sure they know about them. Offer the same discount to all your customers, as it may help close that deal you were working on, or gain extra business from existing customers who don’t intend being at the show themselves.

Request an attendee list from the organisers and let your fellow exhibitors know of your promotions in advance of the show. If you specialise in corporate gifts or exhibition graphics, you may pick up business from fellow exhibitors as they prepare their own stands. Make sure that you are listed in all pre-event literature and that all details are correct – contact name, telephone, email and website.

If the organisers have a dedicated website for the event, ensure they include a link back to your own website and test it out. Often visitors check websites before the event to determine which stands they will target during their visit.

Put a list of events you are attending on your web-site. But remember to update the listing as each event is over. There is nothing worse than out of date information on a company website. Prepare press releases for local and trade press. You may have a new product to announce or a new member of staff or your management team to introduce. Perhaps you have a Formula 1 car or other attraction on your stand that you wish to tell people about. These are all newsworthy topics and have a good chance of getting media attention.

Work the floor as well as the stand

Often, exhibitors stay glued to their stands all day or rush around before the event starts giving out flyers, business cards, etc. A better approach is to make a point to visit each stand and introduce yourself, to pass out and collect business cards and other info. People will remember you better and your sales material has a better chance of being kept and examined. This does require additional staff to man your stand while you are busy networking.

And finally…

Follow-up on all your leads after the show. Additional information requested should be sent through and promises to arrange meetings executed. Make notes on how the show went. What worked well, what the shortfalls were. Learn from each show you attend. Continue to evaluate your results during the weeks and months ahead. How many contacts were made? How many new customers? How many sales made? How many are still customers six months after the show? Being methodical in your approach will bring the dividends you desire and will make that trade show pay.

About the author

Garrett Duffy

Garrett is the New Frontiers Programme Manager at Dundalk Institute of Technology. He has a background in engineering and has lectured in information systems, computer applications and new venture creation. He has been the Enterprise Development Manager at DkIT’s Regional Development Centre since 2007… [Read Garrett’s profile]

Starting point: hitting milestones is extremely important for early-stage investors

The calibre of the team driving a new business is very important in determining an investment decision. This is evaluated both in terms of career to date and track record with the current business of the collective team. Progress to date can be judged by viewing milestones achieved and quality and credibility of the plan going forward: has the business achieved market traction?

Enterprise Ireland gives 10% of the marks during the first phase of the evaluation of Competitive Start Fund (CSF) applications towards the ability to deliver key commercial and technical milestones; as they define it:

Looking for a well-defined strategy and roadmap with very clear achievable and measurable technical and commercial milestones.

With the growing popularity of tranched funding (financing agreement in which the agreed upon sum is advanced in stages depending on achieving specified targets or milestones), setting ambitious yet realistic and deliverable milestones is a hugely important issue for startup promoters at every stage of their development.

So what is traction?

According to Gabriel Weinberg and Justin Mares, (Market) Traction is quantitative evidence of customer demand. The book defines it as:

A sign that something is working – if you charge for your product, it means customers. If your product is free, it’s a growing userbase.

The book Traction: A Startup Guide to Getting Customers talks about the power of setting Traction Goal(s) – this could be 1,000 paying customers, 100 new daily users, or 10% of your market.

What is a milestone?

A milestone is a significant achievement toward a major goal by which project progress can be measured, in this case business success. Generally they build – later milestones are dependent on earlier milestones, representing something of value being completed. So any discussion of milestones requires an understanding of the stage of development of your Startup.

Ash Maurya’s Three Stages of a Startup

The 3 Stages of a Startup is a perfect framework to set milestones in context.

The following milestones are implied by Lean Startup:

To use fast, iterative development practices to:

Validate core hypotheses (customer problem-solution).
Develop the Minimum Viable Product (MVP)
Achieve Product-Market fit
Produce a development and marketing roadmap for scaling

Product-market fit

Accordingly, advocates of Lean Startup describe Product-Market Fit as a critical milestone. This is defined as being when a product shows strong demand by passionate users representing a sizeable market.

Achieving Product-Market fit requires at least 40% of users saying they would be “very disappointed” without your product… Sean Ellis, Lean Startup Marketing

Startup Pyramid

The Startup Pyramid sees the achievement of Product-Market Fit as a prerequisite before significant resources is invested in marketing and sales to scale the business.

Ash Maurya’s 10x Product Launch

Ash Maurya sets a challenge for very early-stage businesses to get 10 Customers, and then to get 10 times or 100 customers, and so on.

The Business Model Canvas

Appropriate commercial and technical milestones should emerge from the startup Business Planning activity.

The ideal tool to list and test your business assumptions is the Business Model Canvas, which identifies 9 building blocks to a business.

business canvas new frontiers

An evolving business

While your traction goal, stage of development and business model will determine appropriate milestones, it is also very important to understand that your business model will evolve over time. Paul Graham advises businesses to do things that don’t scale.

Pulling it all together: The Milestone Mix

Every startup business founder and team – where ultimate responsibility lies – must focus on a small number of stage appropriate priorities to bring their business to the next level. SMART goals are called for – goals must be Specific, Measurable, Attainable, Realistic and Timebound.

startup milestone mix donncha hugues A balanced set of goals is also required. I suggest that the balance of any startup business can be evaluated in terms of balance across four areas: Product, Marketing, Finance and Team – which I refer to as the Startup Milestone Mix.

I suggest that startup promoters should set high-level goals in each of these areas. It should also be part of their job description to ensure that the business is developing in a balanced fashion – using this as a high level framework allows a business to judge if sufficient attention is being given to all critical areas of the business.

For New Frontiers and Enterprise Ireland, the critical milestones to exhibit traction relate to: intellectual property, early reference customers, route to market, internationalisation, engagement with investors, and building a core and non-traditional team – as appropriate to the stage of development of your business.

My conclusion and Call to Action

As Lean Startup says: Life’s too short to build something that nobody wants. Your job, with the support of your New Frontiers network, is to build a business, not just a product. It is all about gaining market traction.

Set goals and prioritise milestones that work for your business; that excite you and act as a calls to action for investors, potential employees and other stakeholders. I hope that you find this article of value as you set about this task!

You might also enjoy our article by startup founder, David Craig:
Building your brand is about sharing your vision]

About the author

Donncha Hughes

Donncha Hughes is a former incubation centre manager and has worked with startups for almost ten years. A big advocate of Lean Startup, his areas of expertise include: marketing, sales, business models, supports for business, business plans and financial projections. An EI mentor and member of the CSF Evaluation Panel, Donncha specialises in working with early stage startups… [Read Donncha’s profile]

Tag: sales strategy

WKI Commercialisation methodology

Step 1

Step 2

Step 3

Step 4

So what? Who cares? Why you?

Stage – Demonstrator Timing: Month 1 & 2

Major initiative:

Measure of success:

Risks:

Resources:

Funded bBy:

Stage – Prototype Timing: Months 3 to 6

Major initiative:

Measure of success:

Risks:

Resources:

Funded by:

Stage – Market Entry Timing: Months 6 to 18

Major initiative:

Measure of success:

Risks:

Resources:

Funded by:

Why is this approach important?

About the author

Other articles from the New Frontiers blog

The entrepreneurial rollercoaster

Managing the bad days

Value proposition and channel to market

Validation

Channel to market

The result

Key takeaway

About the author

Other articles from the New Frontiers blog

Why strategy?

What do you want?

What’s important to you?

How to build a strategy – the process

Action plan

Review

Maintaining action

About the author

Other articles from the New Frontiers blog

Maintain a healthy balance

Prepare the whole team for growth

Keep an eye on cash flow

Think about customer service

Take employees with you

About the author

Noreen Doyle

Other articles from the New Frontiers blog

Getting on television

Blogging and content partnerships

Engaging social media content

Choose opportunities carefully

About the author

Other articles from the New Frontiers blog

Creating the right image through pricing

The context for your pricing

Charging an adequate price

Key considerations for pricing

Case study: setting pricing for a quality systems company

The problem

The analysis

The solution

About the author

Other articles from the New Frontiers blog

Some common mistakes best avoided

Think before you leap

Evaluate, activate, execute

Market evaluation

Market activation

Market execution and management

About the author

Other articles from the New Frontiers blog

The international growth ‘toolkit’

The US example