Thursday, December 11, 2014

Three Stages of the Product Selling Cycle

Good ideas often start in the most unlikely places. After your initial "Eureka!" moment, however, comes the hard part. You now need to turn your idea into a feasible product that will actually sell. As an entrepreneur, you probably know that you should start by validating the idea and creating a minimum viable prototype (MVP). You show the prototype to your friends and family and everyone is excited. But is it a home run yet? Not yet!

Here are three helpful steps, also known as the "Sales Learning Curve," to assist you and your creative team in managing your product's progress from being a simple prototype to becoming a success on the market.

Initiation: You have your product made, now what?
A new product is almost never ready prime time fresh out of the production line. There are always improvements to be made to both the product and positioning; this helps reduce cash loss and accelerate the time a product takes to reach its prime market point. Your MVP may be based on the feedback of a very small group … so it may not accurately reflect and address the broader need of your target audience. Positioning may need to be fine-tuned as well. Finally, your manufacturing processes whether your product is a physical object or a piece of software, still need to scale.

Initiation, the first stage in the "Sales Learning Curve," is the time immediately after your product hits the market. The primary focus of this phase is to learn from your customers. At this stage, you may choose to hire a few analytical salespeople to find leads in the market and get customers' responses regarding the product. Even better than salespeople would be to have your product managers, developers, and executives get out there in front of the first few customers to learn about their experiences with your product firsthand.

The objective of this stage is not to meet sales quota, but rather to gather data to fine-tune the product and learn about where it fits into the market. This is where the product evolves, new features are added, and the engineering team tweaks the design of the product. It is important to be flexible with the market and the final positioning of the product in the market, so stay open-minded! Just because you love your particular solution does not mean that it will necessarily resonate with the actual users.

Transition: Your product is reaching its ultimate form
In the transition phase, which typically occurs when the sales yield is in line the costs per rep, all of the data gathered and improvements made in the first stage are used to create a market strategy for the product. The product is now fully functional and revenues are on their way to maturity. As exciting as it is that your sales capacity is increasing, it is strongly advised that while you celebrate you also hire a larger sales force to help you manage this growth. Equally importantly it starting to expand and develop your support and implementation team.

Your relationship with your customers should be less analytical but rather more service oriented, as well as more focused on solidifying the market strategy you've established. This means that the design of the product gets refined in response to changing market conditions needs fewer and less drastic alterations.

Execution: Sell, Sell, and Sell!
The final phase of the "Sales Learning Curve" is the execution phase. This is when all of the assistance you're receiving with selling your product, your sale plans, and your marketing materials are truly established and solidified. Your selling crew should grow once more in this stage with the hiring of traditional sales force or relying on other strategies optimal for your solution who sell to customers following specific guidelines for the purpose of meeting your sales quotas. Your product has reached its fullest potential and hopefully your sales will skyrocket! Best of luck!

The "Sales Learning Curve" is a process. Establishing a position on the market for your product requires incremental adjustments for you and your team until you hit that sweet spot when you really start selling as you should. What is your optimal sales curve approach for your product or service? Share your thoughts with us!

Rachel and the team

This article was developed in collaboration with Stephanie Gedal.

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