This is taking longer than I thought, but here is the second step, plus a graph.
Feel free to forward this by email to three of your friends.
When you have a qualified buyer, you move on to AGREEMENT ON NEED.
It is important that your product, as mentioned elsewhere, is the simplest necessary to gain enough orders from customers to cover the supplier’s minimum in a workable amount of time profitably.
If you overshoot design, then you ran ahead of the customers, but you also make the “test market” too complicated to analyze. If you have Gluten Free, non GMO cake mixes, you are probably fine in a test market. If you add on “kosher” then you are not sure what feedback is telling you. Regardless of the sales, good or bad, you have no idea what role “kosher” is playing in customer feedback. So introduce your value in its basic form, and then add other values. (Of course if your market is strictly kosher, then “kosher” is not an add-on.)
Not only are you constantly testing, the buyer is also testing, you may have very well have convinced him to test Gluten Free NonGMO cake mixes, but he sees “kosher” adding a variable for which he does not want to control (statistics talk). So you sold him on gluten free, but he will buy from somewhere else.
“Here is the ice cream scoop. As you see it has these benefits, and has not only won these awards, but has ever increasing sales. It allows for delivery of one scoop per second of ice cream to 25% fat content frozen to 12 degrees F at three pounds of pressure.”
They buyer may at this point say, not enough benefit to interest me, “If I am to take yours and dump another, you have to get that down to 5 degrees F. “ At that point you received valuable feedback, and you go back to the drawing board.
Or, the buyer agrees he needs this scoop.
At any point the person with whom you are talking very well may bail out. If so, they were never a customer. At any point they do bail out, the process is organic enough for you to know why, in terms of information upon which you can act to improve your product or company or both. In any event, we are also keen on running off anyone who is not a legitimate buyer, while arriving at the agreement on need.
And note something else, up to this point, there was never any reason to introduce yourself. if you did, you may have out of politeness, but it was not necessary. Most likely you were wasting time if you introduced yourself and discovered that you were not speaking to a buyer. As a matter of efficiency, you should tend not to introduce yourself or anything about your company until you are at the point of “sell the company.” Not out of any sense of secrecy, just cold, blooded efficiency. There is an old protocol, you only give a business card to someone with whom you will do business. If you have not agreed to do business together, then why exchange cards? Respect other’s time... if they are not going to be a customer, don’t waste their time. If they cannot be a customer, extricate yourself.
Since the buyers job is to find new products that will advance their mission, you need to make your offer the easiest, most stripped down as possible. The entire MOQ FOB tactic and tool is devoted to this. With an offer no legitimate buyer can refuse, you move on, one way of another.
When you have worked out what is being sold and that the buyer needs it at the stipulated price, then you move on to SELL THE COMPANY.
Feel free to forward this by email to three of your friends.
2 comments:
Hi John,
There is a new sitcom series on HBO called "Silicon Valley." It's a comedy about start-up companies and the stuff entrepreneurs have to deal with: angel investors, getting funding, dealing with eccentric and weird personalities, etc.. What struck me was how all of that stuff just was not necessary in view of what you teach. Highly recommended for a good laugh though.
Another thing about this show Silicon Valley, note how the entrepreneurs are trying to pitch ideas to venture capitalists, investors, and NOT customers. No wonder new companies have such a high failure rate.
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