A startup is founded on an idea. Whether a great product idea or a new service offering, the founder of a startup is seeking to get other people to invest in that idea, first in development and then through sales and use.
This kind of endeavor is no easy thing. Studies show that the majority of startups will fail before two years. Those staggering statistics demonstrate just how hard it is to make a great idea into a viable business.
In almost every instance, there isn’t a single factor that dooms a new business; there are several errors, missteps, and miscalculations that result in failure. The stretch is quite treacherous for startups that want to successfully create a new product and launch it.
Examining a detailed strategy for bringing that new offering to the market is quite critical as it can help you maximize the resources at your disposal and avoid pitfalls that can be foreseen. The right strategy is a detailed roadmap that the business can follow so that you are not left guessing at every turn.
There are two major components of a go-to-market strategy: sales and marketing. Most successful companies are well aware of this. It is imperative for you to understand that sales and marketing are counterbalances that are much needed. If you are using less marketing when launching a product, it is essential for sales to pitch in more. If you have a lean sales team, it is necessary for the marketing team to push it.
The biggest challenge a startup will face is choosing which tool to focus on, sales or marketing, based on your business and the specific product that you sell. The answer to this critical question is quite essential. Most companies do not want to end up in guesswork and hence put in resources in both of these things. It is not the best thing to do. For a lean, new business, it’s best to invest most of the resources into one or the other and not try to do too much at once.
As a startup, it is essential for them to determine which direction they will go by examining each variable in marketing and sales.
No 1: Determining the Price
You should decide the price of a new offering by checking how much a customer values it. In a nutshell, the sale price is the amount that the customer is willing to pay. What the customer perceives he or she will get out of an investment in the product is the biggest factoring in setting the price. If you have a product that people are willing to pay a premium for, you can conceivably have a dedicated sales team to contact individuals or businesses about your product. With enough margin, a sales-intensive strategy can be a good fit.
No 2: Market Size
You should determine the market size by the number of clients possible that you have. The products that you develop may be something of interest to millions of people. For example, certain basic products are applicable to a huge range of people all over the world. But there are some products that you can only sell to a few customers in a niche market.
Billions of people might need to buy toothpaste, but when it comes to demand for jet engines, customers in a position to purchase and maintain that kind of machinery are few and far between.
If you are approaching a limited market with a small number of niche buyers, a sales-intensive approach is a good idea. Rather than dumping money into ads that will be seen by many, many people who have no need or interest in your product, it’s better to spend money strategically on sales.
Experienced sales professionals can network effectively and offer a product in personal communication. For a specialized product, this makes the most sense. Attending industry meetings can be a great tool for finding your niche customers. Don’t rely on a marketing blueprint that doesn’t apply to the product you are selling.
No 3: Levels of Complexity
Some products are dead simple to use, but others require you to spend some time to learn about the product by studying the manuals and guidelines. For example, using toothpaste is something elementary and does not need too much assistance. But when it comes to jet engines, it is a complex product as it uses so many components. One needs to learn about using or installing the product. When it comes to any complex product, it is sold and not marketed.
No 4: Fit and Finish
There are some products that you are ready to use as soon as you buy them and take them home. But some products will take so much time to install as you need to follow multiple steps. Toothpaste, for example, is super simple; no one needs an instruction manual to put some toothpaste on a toothbrush. In the case of a complex software product, purchasing it is only one step; there are so many others steps you may have to pay attention to successfully use the product.
You should understand clearly that not all products that are complex are hard to use. A recent example of a sophisticated product that is easy to use is the Tesla car; even though there are so many computers inside it, one can start it quickly using a key and basic operation is very simple.
Another consideration around sales and marketing components for your startup is your target customer. Some startups are aimed at other businesses, while others sell directly to consumers. The category your startup falls into makes a huge difference to your sales and marketing approach. There are certainly many more general consumers than there are businesses, so if you are entering the B2B space you’ll want to invest in sales rather than marketing.
In conclusion, it is vital for companies, especially startups, to identify the company’s exact mix of marketing and sales. Depending on your product, you have to choose an approach that works best for your unique offering. If your product is like a tube of toothpaste, you may have to select a go-to-market strategy that is marketing-intensive. But if your product is something like a niche tech product, you need to choose a go-to-market strategy that is sales-intensive.