Battle plans in the campaign for customers

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Make no mistake about it, business is war. And a business’s battle plan is the course it charts to reach its key market segment. Most start-ups spend little or no time planning their path to market. They assume it is obvious; that they will sell directly to the customer, or through a convenient distributor, or they will work with whichever partners happen to reach them first.

They could not be more wrong. The one constant that sets successful start-ups apart is that they pay ­obsessive attention to early keyimportant decisions. Design your path to market correctly and you will create a business whose growth accelerates itself. Do not design it at all and your business will find the obstacles by running into them.

When you think of your product, think about water. Water naturally flows downhill following the path of least resistance. It shapes its course in response to the nature of the ground over which it flows.

The entrepreneur who lets his path be shapedmoulded by the shape of the business landscape will inevitably, like water, find the most efficient path to market. You discover your path to market, you do not invent it.The very act of

Mapping the landscape that lies between your product and your customer will reveal the path to the ­customer. A market map includes competitors, partners, vendors, distributors, agents,, influencers and gatekeepers. SoYou must findthem, study themand understand them in relationship to you.

You know your competition when you know how you differ from them and which of those differences matter. Whatever difference your customer cares about becomes your unique selling proposition. The character of your USP shapes your path to market. If your difference is ­service or delivery efficiency, for example, then such intermediaries like as distributors become obstacles instead of conduits.

Dell Computer’s USP, for example, is mass customisation and efficient delivery. It has T HASno choice but to sell direct if they want to deliver that benefit.

Successful start-ups know their competitors by using their products, checking the quality of their service, testing the claims they make and by knowing how much money they make and and how much they spend. A successful start-up can directly compare a competitor’s cost structure directly with to their own.

You know the market influencers when you know whose advice or view sways your customer. The most direct path to the customer may be to influence the influencers.

Influencers come in many forms. In the UK, Jeremy Clarkson and Top Gear, the television programme he presents, are influencers of the UK automobile market.
In contrast, aA very large or well known customer can be an influencer. Other customers will follow their lead. The systems and tools that Wal-Mart buys to increase their operational efficiency influences the entire market segment.

In consumer marketing, celebrities make their income as influencers. Tim Henman’s tennis racket drives racket sales. British tennis star Tim Henman’s tennis choice of racket also drives racket sales. Everlast Worldwide, which supplies sporting goods, achieved explosive growth with licence deals across every continent last year after its boxing gloves and gear appeared in Million Dollar Baby, the hit film, and The Contender, the reality television show. The company had its best year in 95 years. of business.

Sometimes it is partners that dominate your market map. If your product depends on another product, to complete a solution then your path to market includes a partner. In the information technology industry, system integrators, such as EDS and Accenture, are important partners because they stitch together the products that complete the solution. They are partners of necessity since they are gatekeepers as well. If your customers only buy your type of product only through a central purchasing relationship, your path to market will depend on getting on to their approved product list. Corporations do not buy office supplies from individual companies.

If your product must appear on retail shelves then the market map will include multiple layers of distributors. Knowing which distributors serve which retailers will define your path to
market.

Finally, no market map is complete without reference to the enormously disruptive influence that the internet has had on all markets. The internet canbe an end-run around channels cut out the intermediary, it can make a local business a global business or it can destroy the notion of territories entirely.

But the internet has its own map. Most people enter the internet through search engines and most people never click beyond the first results page. Thus, your path to market may be as focused as determining how to make your products reliably appear on the first results page whenever a ­prospective customer searches for a solution to the problem you solve.

That means understanding three things: how results rankings work, how keyword ads work and how contextual advertising works. It requires understanding the value of persuading others to link to your site, of creating affiliate relationships and becoming even more aware of how your customers think of you right down to the words they use to describe their problem or your product. It is a new landscape with new rules and a new map.

In short, the path to market is a key part of your business planning and will determine your order of battle, your priorities, your targets and the very structure of your organisation. Not something to be taken lightly at all.

HOW TO GET OFF TO A FLYING START

■ Pay obsessive attention to early important decisions about your route to the market

■ A market map includes competitors, partners, vendors, distributors, agents, influencers and gatekeepers

■ Know your competitors by using their products, checking their quality of service, testing their claims, knowing how much money they make and how much they spend

■ Remember, the most direct path to the customer may be to influence the influencers


For previous articles in this series: www.ft.com/startups

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