Archive for January, 1991

The First Step

Tuesday, January 1st, 1991

(First published in AutoCAD Market (The CAD++ Newsletters’ predecessor) in January 1991)

Let’s say you have a product – a device, software package, or
service – that you think you can sell to the public at large.
Does it (and do you) meet the following criteria?

  • It solves a problem and/or makes certain tasks easier.
  • It has a target audience.
  • It works solidly and reliably.

These criteria are important for anyone, whether it be a
one-man operation looking to start up or a large, established
company. Let’s look at why these criteria are important in
launching a product.

Solves Problems/Increases Productivity
Unless you’re the kind of person that can sell refrigerators
to Eskimos, you need a product that will make sense to the people
you try to sell it to. If it solves a problem, especially a
problem that is really irritating, then it makes sense. In the
AutoCAD environment, a good example of this is a plot spooler.

A plot spooler helps eliminate the wasted time spent waiting
for a plotter to plot a drawing. That wasted time translates into
time, and hence, money. A plot spooler also happens to increase
productivity – but almost any product that solves a problem will
do that.

If your product is a service, it still needs to meet this problem solving need. Services such as plot scanning, 900 numbers for ACAD help, and being an AutoCAD dealer all meet this requirement.

I should point out that "sex appeal" plays a part, especially for products that are not especially useful. Sex appeal not only applies to beautiful models wearing the latest in skimpy apparel, but also to products that touch the emotional part of the soul. These "sexy" products have to look neat (as in "wicked awesome" – a term widely used by today’s teenagers) and appeal to our sense of adventure. An example here might be the "beetle" mice, mouse warmers, or even Autodesk’s Animator. Animator is definitely useful, but generally only to the small set of humans that have creative and artistic skills. But yet, Animator and its resultant creations, raise that emotional spark in the rest of us, giving us the feeling that by using that package, we might in fact find an artistic streak or a flair for visual creativity within us.

Target Audience
In addition to solving problems, your product must have a market. If there are only 14 other people in the world who can use your product, you either have to be able to justify an outrageously high price, or have minimal overhead – and this only applies if you can easily contact these 14 people.

What this boils down to is that you need to target your audience. If it will take thousands of phone calls, letters, etc. to land minimal business, you should probably find another product. However, if your product applies to a reasonable subset of people that you can target (i.e. 20% of all readers of XYZ Magazine), then you have a potential winner, just by using XYZ Magazine to market your product.

Target audience mismatch is one of the biggest flaws in product marketing strategies. This is important to consider if you are planning on developing a product you think will be useful to others, because targeting an audience should be part of your development and design efforts. Too often, an engineer will develop a "great" product, only to discover that no one wants it. You shouldn’t be developing pink pastel gun racks for members of an all-macho-male gun club, nor should a portable cassette player mean one that weighs 10 pounds and comes with an atomic generator on wheels.

Targeting also applies to price. Look at other similar products that may already be on the market and see what prices these products sell for. Look at what features they offer that are better or worse than yours. And based on that, price your product. If the competing companies have had the products on the market a while, these companies have probably determined the best price point for their product, and you can use their research. If you don’t have much to differentiate yourself with, offer a lower price. Make sure however, that your price covers at least your material expenses, such as packaging, shipping, and even phone calls. This gets a little bit more complicated if you go through dealers and distributors, and I’ll cover pricing and price elasticity in a future issue.

If the product you have is new and different, you can do some inexpensive research that will help you better price your product. Call other likely targets. Also take advantage of local user’s groups and even electronic conference, such as CompuServe. Ask questions and maybe provide an incentive, such as a discount on the product, in return for useful information. This approach can also help you tailor the product more towards your target audience.

Solid and Reliable
This should go without saying, but unfortunately, pride in workmanship has sagged badly in past years, and usually seems to be inversely proportional to the size of the company behind the product at times. In any case, in order for you to survive in the long run, your product must be solid and reliable, and if a customer discovers a problem, do your damndest to resolve it, quickly. The best way to ruin a company is to ship incomplete or buggy product, or provide lousy service.

Secondaries
If you managed to respond positively to the three main requirements above, you may have a good chance establishing your product in the market place. Two other criterion are useful to help you do a better job of marketing and selling your product:

  • Writing well or having a friend who can write well.
  • Being able to afford to spend at least a couple of
    hundred dollars.

Writing Well
Writing is important because it is used in a wide number of areas: product manuals, product literature (brochures, etc.), cover letters, correspondence, and publicity. If you do the writing yourself, always have someone else proof it. If you have someone else do your writing (preferably someone known for his or her writing skills), compare it to how you would write. Have them compose a sample cover letter, and use it as a template for all your future letters. And use your spell-checker or dictionary. There few things that will turn off an educated customer more than improper use of language and bad spelling.

Money
Money is always important. The reason I specified a couple of hundred dollars is because that’s what it will take to buy an answering machine and get a separate phone line installed in your home. This is to make sure that once you start your marketing efforts, any customer or potential customer can get in touch with you. Make it as easy as possible for a customer to order your product. This grows down the road into 800 numbers and FAX machines, as well as BBSs and participation in electronic conferencing systems.

Summary
While this is still a coarse view of product planning and marketing, using these tips should help put you on the right course towards making a product successful and profitable. See you in the next Garage Entrepreneur!