Back in 2016, I wrote and shared an article that looked at how you should consider market maturity as an input to setting effective go-to-market strategy.
The article was originally triggered by a conversation with the owner of a prospect (later a customer of align.me) Justin Annesley the Managing Director of local printing company Inkifingus. Justin was struggling with accelerating his SME print business revenue during a period where traditional printers like his needed to transition from long-run print to shorter run, digitally enabled solutions. Many of his traditional buyers were moving away from him to lower cost, more commoditised on-demand alternatives – including a new raft of global competitors offering self-serve designs, print, pack and ship from overseas locations at lower costs than he could produce locally.
More recently, I caught with Justin again, and our conversation turned to how he had coped through Covid-19 and how he had pivoted his business given the technology changes his industry had faced.
In this article, I’m going to revisit the recommendations from our original article around setting strategy informed through the lens of your buyers and market maturity theory, look at the impact of technology as we transition through what has been referred to as Industrial Revolution 4.0 (IR 4.0), and give actionable tips on how to build a GTM plan that will help you cross the chasm in a post-covid world.
SME’s must change as the world around us does
Long run traditional offset printing, like that Justin and Inkifingus are experts in, is one example of an industry that has gone through considerable change over the last 20 years. This change has been brought on by both demand factors (consumer demand for newspapers, mail, novels, textbooks all moving online) and supply factors (cloud-enabled customer-centric print ordering applications, lower-cost short run Digital Print solution, 3D Printing).
Like many businesses impacted by technologies that dominate the transition to IR 4.0, print shops worldwide are being forced to be nimbler and more client connected and technology-enabled if they want to survive. Geography and the tyranny of distance are no longer the barriers to entry that they once were, as we see global print companies with highly automated print centres making it cheaper and more effective for clients to have printed items shipped internationally rather than buy from small local suppliers.
Whilst Covid 19 has created a pause, the long-term trends are clear: Australian SME’s must reset strategy and tactics if they are to survive.
Easier said than done, right? Well, the good news is there are some guiding principles that you can use to help you make this transition. Crossing the chasm (or chasm theory), a book written by Geoffrey Moore and first published back in 1991, provides us with a framework for some of these.
A refresh of Crossing the chasm (and how it helped Steve Jobs)
Crossing the Chasm succinctly captures the evolution of buying groups in response to technological change:
- In the early market, a small number of diverse, market-leading buyers seek to be the adopter of innovation. Price and completeness of functionality are overshadowed by the buyers drive for competitive advantage.
- As markets mature, small groups of pragmatic buyers emerge. These early segments have moved beyond seeking a competitive edge to looking for demonstrable ROI from other like-business in their segment as the driver of their investment decisions.
- Over time, we enter a phase of hyper-growth. Moore described this as the tornado, a happy time for most vendors but especially the market leader in the category. “From who and how fast can I get it” become the buyers catch cry with vendors needing to reshape their GTM from demand creation to demand fulfilment, often characterised by the rise of Indirect Channels to market.
- As the tornado subsides and the market reaches a state of maturity, functional and or technical buyers begin to dominate the purchasing process, driving down vendor prices and cherry-picking the solution elements from multiple vendors. To survive on main street, all vendors need to optimise their sales and marketing channels, supply chains, and service delivery models. Cost efficiency becomes the order of the day.
The story goes that at the time of writing Crossing the Chasm, Steve Jobs was struggling with “where to next” for Apple in the personal computer segment and sought out Geoffrey Moore for advice. Somewhat confrontingly, Moore advised Jobs that the days of the Mac Computer hyper-growth were coming to an end and that he would never catch the Wintel offerings or hold position as a market leader in personal computing.
Moore’s advice? Go back to your core and leverage Apple’s innovation spirit/expertise in end-user focused design and find a new niche to own. We now know that Jobs took Apple, reset the firm’s fortunes with the release of the iPod and, while never recapturing first in market, reinvigorated the Mac with the iMac.
So, what does this all mean to you? Even if your traditional business is in a category dominated by mature, cost-driven buyers, there will be opportunity to find new niches and ride the next growth curves. Apple and Jobs leveraged Moore’s advice and did both.
And size of company does not have to be a barrier to realigning your strategy to the maturity of buyers in your market/s. Consider Justin at Inkifingus, who has grown his business by acquiring older, less nimble competitors to achieve scale and lower cost in the traditional print space whilst at the same time looking over the horizon, guided the trend to more sustainable printing, to identify new niche segments. (For example, Stone Paper – an alternative to printing on paper produced from 80% crushed stone gathered from industry offcuts. It saves up to 20 trees per tonne of paper produced).
What Covid-19 has to do with it
Covid 19 has no doubt been an accelerator of technological change. You only have to look at the use of video conferencing to identify an example of this – between 2019 and 2020, meetings held over Zoom went from 5 million per day to a massive 300 million per day (a market segment massively accelerated by the onset of Covid and moving to what Geoffrey Moore described as the Tornado phase of adoption.)
But even before the disruption triggered by Covid 19, businesses globally were being impacted by what is described as the fourth industrial revolution (IR 4.0) – “the ongoing automation of traditional manufacturing and industrial practices, using modern smart technologies that are integrated to increased automation, improved communication.” IR will reset the global business landscape for all countries and businesses, offering opportunities for those who assess and adapt and create a challenge for survival for those businesses who cannot.
The transition to IR 4.0 and acceleration brought on by Covid provide a myriad of opportunities and alternative paths, so how do you choose which one?
How to use portfolio planning techniques to optimise your go-to-market strategy
Taking into consideration the impact of Covid and the technological changes impacting the buyers you serve:
1. Map out the long list of problems that impact your buyers that you solve.
2. Think about how attractive these problems are: How big is the category today (how many buyers and what revenue is being earned), the number of competitors you face, and the maturity of buyers in the category (are the buyers predominately early market and value-based or entering maturity and price-driven.
3. Consider how well positioned you are: Is your branding well known, do you bring a unique attribute to solving the problem, have you fully leveraged technology to deliver cost advantage, have you established references who will attest to your abilities?
When we work with companies, we use a cloud-based planning application called Funnel Plan to capture these inputs from your team and you and then chart them to help you visualise and make decisions on the available alternatives.
Acknowledging that this can be a challenging debate on your own, in our Funnel Camp planning workshops (now also delivered virtually), we go further to facilitate the debate on the alternatives, leveraging our understanding of chasm theory and the impact of technology change, to help you determine the optimum path for your business.
Whilst there is a complex set of decision gates to walk and inputs to consider, the question for you to resolve is this: “which problem will my business be most richly rewarded in solving where I have (and or can build) greatest competitive strength.”
Take a team approach to setting strategy
In two global studies, we considered what the top-performing businesses were doing differently to their competitors in the same industry, and the answer was compelling. These high performers who were closing at 38% higher rates, retaining customers 36% more effectively and achieving up to 209% better return on Marketing’s contribution to revenue were planning quickly and planning together.
Informed by the research and 20 years of client experience, we have become zealots for the value of collaborative planning and the concept of aligning your sales and marketing teams and processes to the buyer’s journey. Our planning solution Funnel Camp has been central to this for over 20 years, informing our work in over 400 planning projects, or roughly 1 to 2 planning workshops per month for this history of over business. That is until 2020.
Travel restrictions and the evolution of collaborative technologies like Zoom and enhancements to our Funnel Plan cloud-based application made it possible to accelerate the deployment of virtual go-to-market planning workshops such that our revenue nearly tripled in this part of our business in 2020 and has continued at that rate in 2021. Suffice to say, we are co-travellers in your world as well as we navigate the maturing of our category, Sales and Marketing alignment has come a long way, and the range to technologies available to both plan and then execute GTM strategy.
Seven steps to aligned GTM planning
Whether you meet face to face or meet virtual, get some assistance from a company like ours or decide to go it alone, we recommend you take these steps
Bring your team to come together to:
1. Assess the maturity of the market you are selling into and workshop emerging niches that may present over the next 3 to 5 years (or more)
2. Consider the technology changes likely to impact these markets and your competitive position within them
3. Look at the problems your buyers face, where the pain is great enough for them to want to take action to solve it (and look over the horizon and consider what future problems may be)
4. Use a combination of strength and attractiveness factors for each problem to narrow your focus and, as a team, select the most profitable problem for you to solve
5. Then set strategy (who to sell to, what to sell, through whom to sell) informed by the problem
6. Build marketing and selling tactics designed to engage, even progress your target buyers through their buying journey
7. Bring all the elements together to create a sales and marketing engine and optimise engine performance by leveraging technology and the right skilled resources.
One final tip: our research also showed you need to plan quickly (1 to 4 weeks) and review often. Apply agile processes and deploy leveraging short, sharp team sprints if you want to drive the best results.
We live in interesting times. Good luck on your journey and as always sing out if we can be of assistance.