Nothing Scales When Sales Directs New Product Development Activities
I bet your best sales people are customer oriented and know that the best way to get a sale is to understand what a prospect’s needs are, and if the prospect needs matches the solution set your company offers, present a persuasive selling solution that converts the prospect to a customer. The more a sales person knows what a prospect’s pain points are, the better she or he can present solutions a company offers that ends in a sales and a satisfied customer.
Product development also succeeds when marketing identifies customers pain points and unmet needs, and creates a unique value proposition that customers choose over competing and existing solutions, or in the case of a new-to-market product, become a new consumer of the goods and services to get an important job done better that otherwise wouldn’t have been able to do before.
So what’s the difference between the two disciplines? Simply put, marketing’s role is to identify problems and unmet needs of groups of people (the market), create a customer value proposition (product, service and brand) a company is capable of delivering, and build awareness and create demand. Whereas sales is responsible for converting qualified prospects (marketing has identified) into paying customers with solutions the company currently offers.
Marketing is more strategic than sales. Marketing activities include identifying the needs of a large (or large enough) set of people (target market), designing and developing products to meet existing and latent needs of a target market, and creating awareness and demand for the product (promotion and advertising).
Sales is more tactical. Its activities are focused on converting prospects in the target market to paying customers. Sales involves directly interacting with the prospects to persuade them to purchase the product.
Sometimes however, sales really struggles with sales execution because marketing has failed to identify a compelling customer value proposition, or perhaps failed to generate interest and leads in the target market. Or failed to create a repeatable sales process the sales team rely on to scale its activities (see my post “Maybe Sales is Struggling Because Your Marketing & NPD Execution Strategy is Broken).
So sales takes on the activity of marketing, and tries to figure out who the customers are, what the product needs to do, and how to sell it. Sometimes this works, and the sales team discovers a winning formula that scales. But more often than not, sales creates one-off solutions. Highly customized product solutions that require an overwhelming share of product development resources to execute.
While a sale is better than no sale, highly customized product solutions are nearly impossible to scale, and more often than not, tend to yield me-too products because the emphasis is on the short-term of making a sale, versus the long-term strategic objective of creating sustainable growth by efficiently attracting and retaining new groups of profitable and satisfied customers.
One-off custom solutions tends to scatter a company’s product development efforts. No common definition of a market opportunity is established, and the product development teams are in a constant race to help sales close the “next big deal.” Inputs are assumed to be representative of what the market wants, but in reality, inputs are nothing more than customer wish list.
The long and the short of the situation: “nothing scales when sales directs new product development and sets priorities.” Sales priority is to sell existing products and solutions to qualified prospects. Its incentives and compensation are designed around selling existing products, not defining new products. It lacks the skill and disciple to translate the voice-of-customer into successful new products.
Sales will definitely tell you what customers are telling them: “if we only just had so and so, we could sell a boat load of these.” Perhaps some of these inputs have real merit. But they are nothing more than inputs that an NPD team needs to flesh out using its idea-to-launch framework.
If you find your NPD team getting bogged down in one-off’s, it’s time to rethink your idea-to-launch framework and new product development portfolio management system. The jobs-to-be-done marketing lens provides the structure and discipline to uncover what customers really want and provides a methodology to anticipate what the market will value and buy. And a product portfolio management system identifies the best product opportunities that will result in sustainable growth over the long haul versus the short term goal of getting a sales.
Customization may be a good product strategy depending on your business model. If so plan it up front, create platforms to allow efficient customization, and allocate a dedicated team to support customization projects.
If customization is not part of your business model, do what you can in the meantime to help sales get through its current challenges, but don’t let sales become the directors of your innovation and product development efforts. You may not like the results you will get when sales stops doing sales and starts doing new product development.
Think strategically and make sure your NPD system delivers winning products to your sales team so they can sell what you make versus asking you to make what they can sell.