One of the hardest aspects of introducing new products and services is gaining adoption and credibility to sell more. If you are in a tough market space such as healthcare, local government or education for example how do you establish your product and grow it sufficiently to market it? How does your organisation know if it’s the right development investment?
Growing a reference client is vital in these sectors and knowing how to do this is key. This article explores the best ways and the different approaches you or your organisation may want to take to make your products grow and take market share.
Whether its products or services the process of developing a reference client and developing your services and products with you, requires a different relationship. This relationship involves your client being closer to your business, where you will let them in on more of the company DNA and cultivate a partnership experience. Developing a client who believes they can contribute to resolving industry problems or gaps in innovation in their sector. This can add significant kudos to them. They become a ‘leading light’ in that area. This is a key consideration as well if your flagship products and services are to prosper. You need your reference client to sell for you.
1 Make a Decision – decide to reference client and market test
It is not advisable to simply think your CTO will come up with the next widget and simply take it to market. Too many businesses have gone to the wall or plateaued because the first great idea that launched you or your business is now being copied or at least you have some competition. You made headway the first time, and took a march on everyone else, but eventually you get caught. Because that is commerce. It’s a cycle. Don’t therefore, assume you can simply come up with some new service line or product again and repeat the exercise. Your market’s demands will have matured (partly because of what you launched initially and had success with). Your competitors will be doing the same to innovate and add value. Your no longer alone. You may have to accept marginal gains. Marginal gains that keep adding value to customers and growth potential to your business. This is about sustaining your future.
2 Getting the right client
There is rarely a ‘right’ client, however it’s in the relationships between your sales/account managers and clients that you will find the receptive clients. Think about those clients you have who are asking for more features or service benefits and who sometimes offer statements such as “what if your product could” or “your first product was great and we are pleased with it. It made us think about what else we could do”. Those types of statements are signs of a client who may be open to a different kind of working relationship. Be mindful to listen to the comments of your sales/client managers. Get them in a room and explore with them the ideas you have for new service lines and products. Listen to them. They will know what clients are asking for (if they are any good, and not simply chasing margin sales).
A client that may work with you uses your current offerings extensively, making use of all of the current features of your service or product and has renewed contracts and/or license without tough negotiation. They are a good adopter.
From your perspective, what is the current state of your new offering? It would be wise to consider the gains you need when assessing the right client. You have a list of potential good adopter clients from your sales/client management team. Now you need to decide your criteria.
I have worked in organisations where the geographic’s played a significant role. We wanted to have reference clients that other potential customers could visit. Long journey times and busy schedules meant working a geographic level simply to get better country wide coverage. Not so much feature growth but moreover high adoption levels and measurable success that could be certified and published.
2.2 Feature Adoption
In other organisations we wanted to establish the use of mobile technologies and use of apps to enhance the user experience and increase feature adoption amongst clients. We operated in a locked down healthcare market at the time so to do this we had to get over a number of hurdles and ensure our clients would allow mobile communications to their network, had the right browser and version, the right operating system and that their data traffic management would permit the exchange of data to mobile devices. Not all our clients at the time would allow this and therefore our feature enrichment strategy focused on some smaller marginal gains. The restriction on mobile date use and management of devices restricted us to the point that this idea petered out.
Your third consideration may be to look at interoperability. Many businesses utilise bespoke systems and applications and when these are interoperable the improvement in processes becomes clearer and can provide internal overhead reductions for your clients. You may need to therefore develop relationships with third party providers or invest in development directly with other vendors to achieve this. Trying to create your own niche product or service may add feature value but if it interoperates it will offer an innovation that potential reference clients will find more appealing as they will be buying a solution to their needs rather than a just a part of the solution.
It doesn’t have to be an extremely long reference client project but think ahead and plan when you would want your product/service to go to market. Work backwards firstly. Don’t let it take as long as it takes. Set milestones with a client and clear expectations of what you are looking for in the heavily discounted, if not free to use approach you are taking with the client.
Take for example a new software product. These high level points to the left are somewhat over-simplified but they do show some base thoughts about what you
need to consider. Flesh this out some more but the base concept here is not to leave it to drift on without goals and measurements of success on both sides. Scope it. Plan it. Decide how you are going to measure success, both for you and for the client. Be prepared to accept failure but plan for success.
4 Get a good team
It is better to provide a dedicated sales/client manager to lead this exercise. Reference client development is a sales and business development exercise rather than a delivery project. Have your delivery experts on the reference client project but don’t let them lead it. They are usually focused on adoption and used to sign-off delivery to move on to another deployment. Your sales/client manager lead is looking for that piece plus the measure of value add provided, a measure of the benefits the client is gaining. Your product owner who has developed the prototype service or product is interested also. They want to know if the product/service is received well, what may need to be redesigned, the behaviour of the client with the service or product etc. Below is a high level list of who should be involved and what role they might play.
- Sales/Client Manager/BD Manager – leads the project. Focused on how the opportunity can increase market share, the product portfolio and sales.
- Product Specialist – knows the product inside out. Can train users, configure changes and understands the client’s workflow and behaviour. Focused on product feedback and intelligence gathering.
- Product Owner – Developed the product. Its’ their baby. Better to keep them in the tent than out. Focused on the product development.
- Delivery Project Manager – ensures the product/service is deployed to the reference client and is supported and working correctly. Focused on support.
5 Loss lead
Be prepared to give it away. No matter the cost, trying to make margin with a reference client is a flawed approach. Give it away at cost. Your reference client may believe they are getting it for free in cash terms but when you discuss with them the sales support for potential customers to come to site to see the project, the marketing articles they must edit and approve, the sales conferences they may have to attend with you and the time internally they will need to dedicate to testing the offering, they will know that the cash saving has come at a cost.
Operate some internal cash flow/burn rate budget planning though as costs can get away from you. Do this from the beginning and set a clear limit on this. Why? Because a reference can often get carried away with an inflated sense of themselves. They can develop an unhealthy sense that the product will be nothing without them. This can lead to numerous feature set requests instead of testing what was already provided. Whilst you balance this demand not only do you need to ensure any developments don’t cost your organisation too much internal investment but secondly it is vital these requests for feature and function are not only reference client beneficial. You and your product owner need to hold fast for a client’s desire to have a bespoke product or service. You need to ensure what you develop further will measure well in the market place.
I have been involved in many instances where the client wanted a local change whilst developing the reference product. At one point with a certain client I had to inform them that the feature they wanted was not conducive to our market ambitions. Indeed, we had secretly polled a small percentage of our existing clients who had said a flat no to the feature set as it changed the workflow beyond what they wanted. This can have national consequences particularly in health settings and your organisations should be mindful of change requests to services and products that meet only local reference client needs.
6 Create the appropriate legal framework
Create a binding agreement that speaks clearly to the intellectual property of the development. You may need to collaborate legally so therefore beware of the type of legal agreement you draft. A collaboration agreement is meant to have shared inputs and outputs so this may not be an appropriate agreement to implement. If you are developing a UK public sector organisation such as NHS Trust, local authority or school for example the rules on collaboration need a good review from a lawyer to protect trade rules and fairness. It is hard for such organisations to exploit IP anyway so its less of an issue as the highest interest to a public sector body is largely kudos and reputation build.
With a commercial supplier there is greater freedom legally but of course that comes with more risks. Protection of IP is more important for you in this case.
Create a test bed. Whether it be for services or product you need to get your products and service used repeatedly in the reference client project. They key though will be testing against a balanced approach. That is, testing the product or service to ensure it is fit for purpose but also testing scenarios for strategic fit. Here we create the buyer personas (BPs) and test these. By designing the BPs we can establish which part of the customer experience will make the largest impact. Where the impact will be felt, in what way etc etc. This requires linkages to whoever is responsible for your business development, sales and marketing.
Be clear on what success looks like for the products and services. There is nothing worse than someone internally developing a product function or service definition that is based solely on the internal. It must have reference client approval. It would be wise to also speak internally to this. Both your reference client and your organisation want success. Defining what that is as objectives in the proposal is a good way of being open with your client. For example your objectives could be as follows.
8.1 Client objectives
- Develop for us the client a superior product/service for our requirements.
- Establish proof of concept for ‘said software/service’ that may be applied across the industry where we the client can lead thought and development in the sector.
- Create for us the client an environment of development that engenders long term relationships with providers. Us being a ‘greenhouse’ for development of said products/services at the forefront of innovation in this sector. Adding weight and kudos to our reputation in the sector which will lead to increased sales/greater central funding.
8.2 Supplier Objectives
- Provide a place for client development of our products and services that will baseline their viability, adoption and potential for success.
- To establish a client led behaviour driven development life cycle that can be repeated with this and other clients.
- To develop said product sufficient to take greater market share and increase sales revenue.
- To provide said client with a product they will adopt throughout their organisation to the degree that we jointly can demonstrate it’s benefits to other potential customers of said provider. Helping said provider to win more business.
8.3 Efficiency and costs savings
The reference client approach saves money. It discerns the true customer requirements and provides the best balance between what your organisation wants to develop and the customer needs. Thus, your organisation should not waste money developing function and service that is not required.
9 Sales generation
Be clear with the reference client that they will, to get stuff for free, need to host anyone and everything to promote the product or services being developed. Being clear about this up front will save a lot of pain later.
Particularly in the public sector clients are less aligned to commercial thinking and therefore careful message management is important. Let you marketing or BD director handles this with the client sale lead.
Agree in your documentation how long this would be for. I worked with a client for almost five years where they hosted and referenced all of my first ten new clients. They attended our sales conference and national domain conferences as our dedicated reference client for five years. Adding insight to presentations, product demonstrations and use cases. Speaking with potential clients attending our stand about scenarios they could relate to. Invaluable.
10 Product and Service Integration
As much as your organisation needs to create a reference client, consider product/service led integration. In other words, whilst your organisation may want to create a reference client for one product at one location for geographic reach potential it may be that to get the full service catalogue developed you may need to create a reference client for feature and function elsewhere. Eventually you need sites that can speak to all and some of your offerings.
This will require planning, timing and coordination and can be complex and burdensome. It is better lead by a dedicated Research and Development team but steer clear of it being led by ‘the creatives’ in your organisation. Creative they might be. Organised they won’t be. If you don’t have well managed R&D it would be wise initially start simple with one product and one client and one reason. As your organisation becomes better at it you can add complexity at your own pace.
Building a reference client is management over science over creativity. Yes you need the scientific analysis and yes you need creativity to develop good products and services. You need though an overarching management of the client and your teams to deliver success. Combining all three provides a greater opportunity to repeat the exercise and develop long term reference clients that will, by definition become a vicarious element of your salesforce.