Why Successful Developers Invest Their Time to Create Diehard Fans During Product Launch

This post explores ideas that can guide some of your new product development decisions to a higher return on investment (ROI) at product launch.

This post was inspired by a video featuring David Maister titled Marketing to Existing Clients. Maister is an authority on the management of professional service firms. I will start by reviewing the primary idea that Maister proposed in his video and then I will show how this idea can be applied to new product development and launch decisions.

Listen to Why Successful Developers Invest Their Time to Create Diehard Fans During Product Launch [9:08 minutes, 4.9 MBytes, Apple QuickTime / iTunes is required]

The Best Investment for Your Non-billable Hours
Maister was speaking to a group of professional service providers who were exploring ways to grow their business. He asked, "What is the best investment you can make using your non-billable hours? Where do you get the highest ROI?" To explore these questions, Maister fashioned a 2x2 matrix to represent their market. One dimension specified awareness of a particular problem that had been solved by this service provider. If the prospect is not aware of the problem, the prospect has to be educated about this problem. The other dimension characterized the relationship. If the prospect is not a client, trust has to be earned before a sale can be made.

In this 2x2 matrix, the quadrant in the lower right represents prospects that are not aware of the problem and not a current client. Business development in this quadrant will be characterized by cold calls and assertions about the capabilities of the service provider. Operating in this quadrant usually requires a hefty advertising and promotions budget.

Based on the shear number of prospects, there is great opportunity but let’s focus on the ROI from the non-billable hours perspective. If you are a respected service provider, is this the most effective place to spend your non-billable hours looking for business? The answer is no. This is the quadrant that represents the hardest to get new business.

Now compare the opportunity in the quadrant in the upper left where the prospect is your client. Here, the prospect is familiar with the problem and your company. With the appropriate communication, your company should be favored to get any new business. If you are a respected service provider, the quadrant in the upper left has the best potential for gaining new business with the fewest hours of investment.

The Ultimate Question and Positive WOM
The quadrant in the upper left is very important to the rest of the discussion. Let’s take a brief look at two concepts.

According to loyalty expert Fred Reichheld, the author of the book Ultimate Question, the key predictor of long-term growth is the response to the question "Would you recommend us to a friend?" Imagine a small group of passionate advocates recommending your product to their friends. Now imagine the results of an online community of passionate advocates. Geometric growth is possible.

What I am describing is naturally occurring marketing. John Moore of Brand Autopsy refers to this as Evolutionist word-of-mouth, WOM. It is about diehard fans spreading favorable experiences. A Creationist Word-of-Mouth vs. Evolutionist Word-of-Mouth video by Moore is available on YouTube.

Applications to New Product or Service Development
If you are involved with new product development and launch, the potential for geometric growth from favorable WOM is very attractive. Favorable WOM during launch can produce high ROI. Unfavorable WOM can be devastating.

Favorable WOM is important because it drives sales in the yes/yes quadrant and it helps you make sales in the other quadrants. Existing, knowledgeable clients can help you make more sales by recommending your company and your product to members of their trusted network of friends and colleagues.

Impacts of Negative WOM
All of us have had frustrating experiences with new products. You probably have a list of things that irritate you.

As a new product producer, you probably know that bad experiences are more likely to be shared than positive experiences. Enabled by the Internet, bad news spreads very quickly. It is easy to retrieve and read unfavorable customer reviews. Unfavorable WOM reduces ROI. Unfavorable WOM can overwhelm the intended impact of an expensive advertising and promotion effort.

Guiding Product Development and Launch Decisions
In almost all cases, there are specific development team efforts that have a significant impact in determining if the majority of WOM is favorable or unfavorable. What efforts are likely to result in your customers favorably recommending your product to their friends?

In this episode, I will summarize three of the many methods to improve favorable WOM without big additions to the budget.

The first is to focus on the efforts that produce better experiences for your customers. Ensure that your solution will stand up to their scrutiny. Beside the core product or service, ensure that the other commercialization tasks such as packaging, documentation, installation, and training provide a positive experience for your customers. Invest to eliminate hassles. Enlist the appropriate team to be prepared for launch, minimize the errors of omission, and minimize the time it takes to resolve problems.

The second method is to scrutinize communication strategies. Invest in communication strategies that will make your customers successful. Crafted advertising or assertions about specifications may not persuade prospects.

The third method is to facilitate ways for existing customers to share their positive experiences. For example, items like a helpful user manual or comprehensive online information make it easier for an existing customer to recommend your product to a friend.

To validate these ideas, think back to one of the most successful product launches of 2007.  The Apple iPhone team successfully implemented all three methods. For addition insights, listen to my Product Launch Buzz: Zero to Contender episode.

Let me close with this insight. Product launch is a wonderful opportunity to begin favorable new relationships with clients. Maximize your development investments to produce favorable WOM during product launch because diehard fans tell their friends.