If you’ve been with us through the previous blogs in this series, we’ve cautioned you against the go-to-market pitfalls that could cause your company – and its profits – to slide into a deep ravine on the road to riches.
We’ve alerted you to be wary of competitive and market forces that will diminish demand, and waved an orange flag against a product-market misfits or differentiation that is not enough to dislodge competition.
At this stage in the game – with those blind spots in the rear view – congratulations! You have what it takes to create a quality product or service that will be enthusiastically welcomed and recommended by the buying public.
Are you ready to rest on your laurels and count the hard-earned cheddar? Not exactly. Without developing the proper channel strategy, it will be difficult for your company to scale to meet the moment. Let’s embark together on the road to a reachable pot of gold at the end of the rainbow.
As a refresher, a channel represents anywhere – or any way -- your product is sold or delivered, whether in a store, through a hosted party, via app store download, or on your website. A channel can also be a platform for building awareness, such as Amazon.com or social media sites.
Given the myriad options for reaching your ideal consumer, it’s tempting to try to do it all. In the early stages of a company, this is an impossible dream. For a more mature company, it can be an inefficient nightmare. How do you straddle the centerline and determine the best course of action?
The secret is eliminating channel-market mismatch – another one of the CEO go-to-market warnings that should be on your radar. This is where the channel, or method of making products or services available to others, is actually throttling results because it is not reaching a concentrated enough segment of the target audience. This friction can create a huge drop-off between initial interest and actual purchase.
Some causes for the mismatch: Perhaps the channel is not ideally suited for exploring the product or gaining the education needed to make an informed decision. Or maybe the incidence rate of hot prospects is just not high enough in a particular channel to deliver the leads or customers that the company expects. This is why you need to choose your channels carefully. Let’s look at the two main aspects of cultivating this connective tissue:
Channel-market fit: This relates to the type of buyer who visits a particular channel. For example, co-marketing a travel product for seniors with AARP will give you a better chance of finding someone over the age of 50 that vacations annually than running an ad on Facebook. The channels you choose need to fit the lifestyle or work habits of the target audience. How do they buy? Where do they get information? What channels do they frequent the most? The least?
Like those travel ads on AARP, you need to choose channels that your audience has easy access to, and that make your product/service easily discoverable. For example, if your product is a consumer app, an app store might be a great place for customers to discover your brand, and the free signups you get can be nurtured to conversion via email or other channels your target market frequents.
Channel selection also should include a look at the V-factor – or “viral factor” – of your offering.
This is how you find the tipping point where customers are most likely to share or generate a referral, in turn, expediting word of mouth and make your marketing mix more cost effective.
Despite your best efforts to find channel-market fit, you may still find it difficult to deliver your product through that channel. Now, you have a different problem – inadequate channel-product fit.
Channel-product fit: There’s no substitute to finding places that make discovery, distribution and purchase of your product/service easy and seamless. Mobile apps and chrome extensions are a perfect example. If you are reading a blog and can click to download the product you are reading about, you have delivered value in a way that is easy for the customer to act upon – much like point-of-purchase displays are to retailers.
In-app purchases that extend the experience of the app are also easy and seamless -- if you can complete purchase in the app, as opposed to being redirected to a website (and risk a drop off in conversions). For a B2B company, perhaps this means offering a B2B product as a freemium that individuals can download and use, providing lead acquisition that can be followed up by a sales team.
In the future, we can anticipate more ways to cultivate impulse buys – even live commerce, where you can click to buy a product as you watch it demonstrated on TV.
One sure-fire way to ensure a channel-product misfit? Failing to provide a way to access the product with some seamlessness and immediacy. Relying on mental notes is a recipe for disaster.
Mastering the channel-market and channel-product fit delivers the most efficiency for your advertising buck. Finding the right channels means your conversion rate is higher for the same spend. This also accelerates customer awareness to purchase, because there is more of a “ready to buy” audience in those channels.
To gain these cost efficiencies, sometimes you’ll tradeoff for a narrower focus when measured in marketing reach. Here’s how I like to think about the tradeoffs in channel market fit:
Sometimes a company may decide to deliberately widen the circle with a broader message in specific “test channels” in parallel with a niche campaign, to build brand awareness faster even if it means less cost efficiency for the test campaigns (lower conversion rates), knowing that the added awareness will eventually help reduce cost of conversions over time.
Once you’ve solved for this go-to-market slippery spot of choosing the right channels that fit your product and market, you’re ready to focus on the last barrier to success – getting your sales and marketing and entire leadership team into alignment. We’ll focus on that in the final blog in our series.
In case you missed the first three blogs in the series:
Topics: Marketing Strategy, CEO Marketing Vision, Go-to-Market Strategy, Channel MarketingThu, Jan 26, 2023