Product Launch Checklist
White Paper: Launching a Product in the US - Decision Tree and Check Lists
Copyright Alistair Davidson, 2001. All rights reserved.
Version 2.0. May 31, 2001
In interviewing foreign companies at incubators, a consistent pattern has emerged for many companies. The parent companies send over an individual or management team and the process that they follow does not generate any sales. After 12 months everyone is frustrated and questions the value of launching in the US market.
This position paper is an attempt to help you plan your product launch and avoid wasting time figuring out how to approach the US market. It is slightly biased towards software, services and Internet firms. However, hardware companies can use the checklists as well, and ignore irrelevant stages.
Decision Tree 1
The first and most important decision about the US market is to decide what your objectives are. Your objectives will affect the choice of managers you send over to the US. The most common objectives for non-US companies include the following:
Understand the US market and determine whether there is an opportunity.
Generate sales in the US market.
Monitor US competitors and imitate features introduced in the US market back in your home market.
Perform R&D in the US because of greater availability of specialized services and staff.
Raise money in the US market.
Understand the US market
As a general rule, this activity is done badly by foreign companies. The successful firms have already done a lot of homework before they come over to the US. And they immediately start to work with a marketing consultant or market research firm. The unsuccessful firms spend most of their time setting up an office.
Generate Sales in the US Market
The American market tends to have much higher standards than the smaller foreign market. Competition is high and as a result, Americans expect a high degree of professionalism. Most foreign firms do not invest enough in their marketing literature. As a result, they lose credibility with potential US buyers.
With a huge amount of choice, it is generally difficult to generate US sales unless you look very professional. Hiring marketing staff is necessary before your hire sales staff. Remember that the sales staff need brochures, feature lists, FAQs (Frequently Asked Question documents) and a web site to be able to sell.
And because there is so much competition, general purpose literature that describes the functionality of your product is often inadequate. Foreign companies typically need to develop benefit oriented marketing literature and white papers.
Monitor US Competitors
Generally, this task is muddled along with other tasks such as generating sales. If you are going to monitor the competition, a great deal of work can be done with the Internet and consulting firms. Visiting trade shows and reading magazines are also a low cost way of monitoring the competitors.
Decision Tree 2 - You've decided to launch.
There are four major factors that will influence your success in the US market. They are:
Adequate launch budget
Good marketing and sales team.
High value proposition product.
A sense of urgency.
For most firms, a launch budget should be in the $3M range. If this is not available, take a look at "Bootstrapping a product launch
" for ideas on low budget launches.
If you have an adequate launch budget, then your first requirement is hiring a American oriented team that has launched in the US before. I do not recommend launching a product in the US with an inexperienced team. If you are going to be spending $3M, you should be conservative in your hiring. Hire the best you can. Hire people who have done it before.
Before you hire all the members of your marketing and sales team, it is a good idea to verify that your product offers a high level of differentiated value. If it does not, then you need to think about changing the value proposition.
Remember that while cost is an important competitive weapon, there are many high tech products where the up front cost is less important that the total cost of ownership or the perceived risk of buying from you.
To verify that your product has a compelling value proposition, you have two basic alternatives.
If the product has a short sales cycle, do some test marketing.
If the product has a long sales cycle, invest in market research and competitive analysis. Such research will save you a lot of effort and money.
If you have a product with a long sales cycle, consider changing your business model to accelerate the purchase process. Gaining usage and experience with customers is key to learning about the US market. Most product innovation comes from customers, so get customers early.
Urgency is a critical issue in high tech products. The window for high profits is early in the market so being late to market will result in you making less money. Some research suggests that being late to market costs 33% of the profits in a five year market.
The key advice here includes the following:
Do not let your home head office slow you down. You have to be autonomous in the US and make decisions. If you don't have flexibility, you will not be able to compete.
If head office does not make a decision, then the decision is to proceed. This decision rule is critical to getting to market quickly.
Product launches in the US require that everything be done in parallel, professionally and on time.
Some non-US entrepreneurs have suggested to me that launching in their home market is different. Their home market clients expect more of a semi-custom service. In contrast, in the US, the market is big enough that US firms expect a finished product. They may also expect services, but the core product has to work, be documented and be supported.
Product Launch Check List
Initial Market Assessment
Activities in Home Market
Researching trade magazines articles
Purchasing industry or market research from consulting firms such as Gartner Group, Aberdeen, MetaGroup, IDC, etc.
Ordering advertising information kits from industry magazines. Kits normally contain reader profiles.
Use of Internet research tools for identifying and reviewing competitor web sites, demos, reviews in magazines, e.g. Copernic from www.copernic.com
Purchase of competitor products
Activities in US
Visits to US tradeshows
Hiring of US consulting firm to do initial market research and competitive analysis
Review of opportunity in the US
Development of English language marketing literature with US Marketing Communications consultant for early stage testing and market research
Meetings with potential distributors or end users
Market research and focus groups
For some product categories, solicitation of orders
Modification of product by foreign R&D team for US market
Setting up of initial English language web site by consultants fluent in English with a strong marketing background.
Registration of site with major search engines, industry magazine's lists of suppliers, directories, etc.
Setting Up the US Office
Development of staffing strategy
Who do you need first? Marketers? Engineers? Sales staff? Trainers? Consultants? Business development people?
Hiring of staff.
Identification of contractors and consultants to assist in launch
Product management people
Public relations and marketing communications consultants
Web content development staff
Understanding policies and regulations in US
Setting up company
Obtaining tax ID number from IRS (Internal Revenue Service)
Registering with California and obtaining a California ID number
Buying workman's compensation insurance.
Setting up group medical insurance
Obtaining US driver's license
Engaging a US lawyer
Engaging a US accountant
Purchasing Officers and Directors Liability Insurance.
Localizing the Product
Translation foreign material in English. Editing and review by native English speaking marketing communication staff, technical or manual writer.
Reviewing company name for acceptability in US market.
Registering the trademark
Developing a format for literature
Developing sales brochure in Acrobat PDF format
Developing white paper to review technical architecture or design.
Developing white papers to present business case
Features comparison with competitor products
Features and benefits.
US marketing strategy. Identification of overarching benefit and supporting or secondary benefits.
Training manual for users
Sales training materials for sales staff or distributors
Training material for customer support staff
FAQ - frequently asked questions document
Reviewing the Business Model
Identification of segments
Vertical or industry segmentation
Horizontal application segmentation
Buying process segmentation
Installed base segmentation
Reference site strategy
Business case data development and documentation
Technical testing and third party endorsement by reputable US firms
Services vs. product choice
Product and services
Low end pricing model
Middle market pricing model
High end e.g. site license pricing model
Pricing testing strategy
Customer service strategy
Technical services strategy
Bug and request tracking software
Developing the Marketing Literature
Artwork and logo development, customized for US audience
Powerpoint slide show of screen dumps
Advanced graphical presentation
Crippled software version
Internet delivery via e.g. streaming software
Developing the Web Sites
Project plan for web site development
Quick and dirty web site construction
English content review
Installation of tracking and logging software
Ongoing review of visitors
Sales follow up to high potential visitors
Software usability testing
Web site usability testing
Training materials testing
English help file testing
Demo software review
Market Research and Focus Groups
Definition of market research objectives
Selection of appropriate market research approach
One on one on site surveys
Direct mail surveys
Incentives and prizes to encourage participation
Testing of market research approach
Review of test.
Revised market research approach
Sales and Customer Support Modeling
Identification of sales options
Free trial of product
Give away plus conversion to paying product strategy
Trial period evaluation
Viral marketing (i.e. word of mouth)
Telemarketing to identify and qualify decision makers
Telemarketing to support seminar program
Follow up to web site registrants
Direct sales calls
Responses to RFIs (Requests for Information)
Responses to RFQ/RFPs (Requests for Quotation/Proposal)
Direct response advertising
Direct response advertising in magazines/newspapers/newsletters
Advertising to create web site visitors Direct mail
Advertising to create in-bound sales center
Follow-up to web site registrants
Business Development Activities
Identification of channels
Development of material for approaching channels
Joint marketing strategy
Co-op advertising strategy
Developing Sales Programs
Direct mail programs
Direct response programs
Projecting customer support needs and costs
Time limited pricing / call to action to strategy
Setting Up a Sales Force
Inbound vs. direct sales force
End user oriented vs. channel oriented
Designing Sales Force Compensation
Own sales force
Commissioned sales force
Third party sales force
Incentives and competitions
Trinkets, promotional items
Managing the Sales Force
Sales call recording
Sales management software
Weekly sales funnel and forecast sales reports.
Tracking of yields
Forecast cash flow tied to sales funnel
Evaluation and selection
Discounts and quotas
Joint marketing issues
Managing VARs, OEMs and Systems Integrators
Identification of potential partners
Back pocket distribution channels
Approach but do not consummate
Take projects to them once you have obtained them
Use project to train them so that they will sell your product in future
Need for account managers
Need for joint sales calls
Lead generation and referral
Coop advertising approaches
From direct response advertising
From email or direct mail
From qualified prospect to close
From close to repeat purchase
Other competitors' customers
20% most profitable customers
80% unprofitable customers
Ongoing Feedback to Head Office in Home Market
Responding to ad hoc request
Sales funnel reporting
Cash flow projections
Market share analysis
Staffing projections based upon projections
There are two conflicting imperatives in launching a product in the US.
First, do it quickly.
Second, do it professionally. The product must work. The marketing literature must be clear. The benefits must be well stated.
However, it is totally acceptable to launch a product that is professional and finished but which has the minimum or Pareto functionality. Pareto functionality is the minimum necessary functionality for the product to be useful to customers.
Do not delay your product to have a complete offering. You need to launch and learn.
However, Pareto functional products must be rapidly replaced with new versions based upon (1) your new capability and (2) market feedback.
Typical time lines for launch:
Pre-launch activities: Month 0 - 3
Product completion By Month 3 at latest
Launch planning Month 4 - 6
Beta testing Month 4 - 6
Launch Month 7 -10
Generation 2 launch At month 15 - 18.
So What Do You Do If You Just Can't Finance All This Stuff?
Do a joint launch with another company and share the costs.
Try to sign up a large company and get advance payments.
Negotiate with your venture capital firm and see if you can raise more money from them if Eclicktick Corporation is involved in managing the process of launch and provides your US product management. We can run the launch for you and deal with concerns about inexperience that your venture capital firm may have.