In business, organic growth "comes down to product-market fit," says longtime software industry veteran and CEO Dave Sikora.
Not a phrase you're familiar with? Let's clarify what it means before we talk about how to achieve it.
The concept is often applied to startups and early-stage companies, but it is relevant for any company bringing new solutions to market or pursuing new markets—key areas of focus for organic growth.
How to Work the Product-Market Fit Equation
Solving the product-market fit equation requires you to know why customers would want and use your product and how you are going to attract those customers to your product. Classic Marketing—with a capital "M."
When working with that equation, Marketing needs to excel at five capabilities.
1. Understanding the Needs and Wants of the Market and Customers
I remember a mentor years ago telling me, "It is better to be an aspirin than a vitamin." Aim to solve headaches and know which headaches go with which market segments.
Knowing requires conducting formal and informal research.
Research starts with a hypothesis. What's yours? Collect data: Talk with prospects; attend industry events; and read, read, and read some more (industry articles, analyst reports, experts' blogs, etc.).
We live in a dynamic world, and needs change. For example, Kodak never evolved to embrace digital photography. Blockbuster (and all video rental stores) couldn't compete with on-demand options such as Netflix. More recently, the Toys "R" Us stores are closing because they couldn't compete with online and big box stores.
Your research needs to be ongoing so you can zig and zag with the market. That's the only way to avoid the fate of those failed brands.
2. Gathering and Validating the Market Requirements so Your Solutions, Features, and Benefits Resonate With Buyers
Again, you'll need to conduct formal and informal research. What is the minimal feature set your offer needs to ease the headache? Consider employing a new product development (NPD) process, such as the stage-gate process, as part of this step.
3. Determining the Personas of Your Buyers, and Mapping Their Buying Processes
Developing personas is going to take more than monitoring social media platforms. Conversations with buyers are your best source for personas. That means Marketing must talk to customers—ideally, in-person.
This step isn't about pitching: It's about listening to customers and learning about their problems, challenges, aspirations, and more. Pay particularly close attention to the words they use, and adopt their terminology. Their language needs to become your language.
Of course, everything about your offer matters to you, but the key is to focus on what matters to your customer. Focus is paramount. Narrow down the value you provide to the one or two most important benefits. Note that word "benefits"—speak from benefits, not features. Benefits are what's in it for them; features are your evidence.
5. Preparing and Implementing a Launch Plan That Will Entice Customers to Purchase
The launch plan should be prepared well in advance of launch. It's just as necessary as any of the main features of the new product.
The Right Tools to Help You Navigate the Process
I find it helpful to have tools to support those capabilities. And there's no reason to invent them; they already exist. One you may find useful is Ryan Deiss's eight-question Before/After Grid.
Also, this list of the key questions to ask along each step of the product-market fit process, created by Matrix Partner venture capitalist David Skok can come in handy. That document also includes a calculator template to help you score your product-market fit.
Speaking of calculating, it helps to have a way to determine whether you have achieved product-market fit. I recommend Sean Ellis's approach. With that approach, you attempt to determine the percentage of customers who either would be "very disappointed" if they no longer had access to a particular solution or would consider a particular solution a "must have." Your goal is to have at least 40% of your customers identify with one of those categories.
And for more hands-on assistance, it's always helpful to enlist the help of a professional. Sometimes it takes an expert from outside your organization to look at your data with fresh eyes to find your market and guide your focus.
If You're Focused on the Fit, You're Focused on the Customer
Product-market fit is the ultimate expression of customer-centric marketing: your means to truly understanding the people you're marketing to and then being able to clearly communicate why your solution is compelling to them.
The tips and tools noted in this article will help you gain a deep understanding of your customer and their wants and needs. In time, that will help you build your products to directly address the wants and needs of your market, allowing your company to grow and evolve with your market.
You may like these other MarketingProfs articles related to Marketing Strategy:
- Switching From Product-Centricity to Customer-Centricity With Personas
- Avoid These Six 'Kisses of Death' in Business Development to Keep Your Marketing Funnel Alive
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- What B2B Tech Marketers Are Doing in 2022 [Infographic]
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