Consumer beliefs and behaviors are changing fast. To keep up with—and perhaps even influence—those changes, companies must leverage deep consumer insights. These are internal changes, but they are external ones. COVID19 is one of the most influential forces, which demanded many companies to revisit their go-to-market strategy.
The pandemic has disrupted nearly every routine in day-to-day life. Lockdowns, business hours changes have forced people to redesign even some of their most deeply cemented habits. Almost every area of our life changed, from going to a gym after work, going to a lunch place for a midday break, or enjoying Saturday night at the bar.
Americans' monthly spending is escalating in many areas, according to L.E.K. Consulting Poll spending is up
It all requires a new product or service to be launched or a new marketing strategy to be executed.
The impetus for that behavior change influences go to market strategy as companies need to find ways to meet consumers where they are in the pandemic times and answer their needs in the shaken reality.
As a market progresses, consumers become more adopted and start to look for a different type of service and product. A good example is Blue Apron, an ingredient-and-recipe meal kit service, which sends weekly boxes with ingredients and suggested recipes. Consumers can prepare an excellent dinner at home without going out. It is a new market.
Blue Apron has reported 10% net revenue growth to $131m in Q2 2020 (year to year), and 29% growth compared to the first quarter, benefiting from a massive wave of consumers cooking at home more. COVID shaped a new habit, and this is long term change, which asks for redesigning the value proposition.
Peloton is a fitness sensation and marketing machine— it is millions strong users company. The firm's customers consider bikes and original streaming workouts as a way of life. The company is more than a business that sells exercise equipment. In 2019 Peloton has sold over 600,000 bikes, and the company doesn't stop.
Up 166% since its IPO last September, the company stock has been on an impressive run. The 3rd quarter of 2020 sales was up 66%, reaching $524.6m subscribers (those who purchased the company's bike or treadmill) soared 94%.
Peloton is just one of the hundreds of companies that paved the new paradigms for building and executing a go-to-market strategy and leveraging new marketing techniques. The old model has been challenged by GAAP (Gym As A Platform), where users participate in the challenges and shape their physical wellness, instead of solely working on the body.
From now, any new entrants need to make sure they understand new habits while designing a go-to-market strategy. Companies that try to motivate behavioral change by ignoring or questioning consumers' beliefs pick up a strenuous battle.
Companies like Peloton and Blue Apron has convinced many consumers to change their routines, which caused a change of beliefs about a wide range of everyday activities, from grocery shopping to exercising to socializing.
Companies can leverage habits through redesigning go-to-market strategies. Studies show that plant‐based diets are associated with a lower risk of incident cardiovascular disease. Doctors, fitness consultants, and trainers, journals, and apps are advocating for plant-based foods. The new eating habits have encouraged consumers to become more health-oriented and increase their intake of vitamins, minerals, and plant-based ingredients. Where is a demand, there should be a product.
Unilever decided to ride the wave and redesign its go-to-market strategy via the co-creation process. The company partnered with Algenuity. The startup specializes in microalgae called Chlorella Vulgaris, a nutrient-rich, plant-based protein and fiber source, with a low environmental footprint. The ingredient also is high in antioxidants, vitamins, minerals, and essential fatty acids. Unilever wants to use it as an ingredient in food and beverages.
We will see more examples like the ones above. Digitalization and black swans like COVID19 leave no doubt. The constant monitoring of go-to-market plans, on the go adjustment, and fast execution are the new bread and butter.
After Harvard Business Review quote:
Glassdoor employee reviews and ratings from the American Customer Satisfaction Index (ACSI), which records the opinions of 300,000 U.S. customers on products and services. We looked at 293 large employers spanning 13 industries, including their average overall Glassdoor rating (on a scale of one to five) and ACSI score (on a scale of zero to 100) annually from 2008 to 2018. Using a standard panel model, we estimated the former's impact on the latter, after carefully controlling for employer, year, and industry.
Source: The Key to Happy Customer? Happy Employees, HBR
That has implications for how brands launch products and what types of messages will resonate. A customer expects that companies are acting responsibly. Only then will consumers pursue a particular company offering, purchase from the brand, and form relationships. This type of mechanics needs to be embedded in the go-to-market strategy.
TOMS Shoes was founded in 2006 by Blake Mycoskie, an American entrepreneur. TOMS calls themselves a "one for one company," meaning that when someone buys a pair of their trendy shoes, they donate a pair to a person in need. This approach made customers love the company, which reflected in the growth trajectory. By 2013, TOMS was reportedly generating $250m in sales a year and had donated 10 million pairs of shoes since it's launch.
TOMS Shoes example is evidence of a revolutionary approach to designing business models that differ from traditional methods. While TOMS could be perceived as the pioneer in 2006, today, this kind of expectation becomes a new normal. A recent U.S. national survey, titled Shifting Expectations, finds Americans observe how companies are behaving during the global COVID-19 pandemic. 86% of responders admit they are paying attention to "how companies care for their employees' safety and well-being". Moreover, 82% pay more attention than usual to "how companies treat their customers," and "how and where companies source their products and supply chains.
It became essential to communicate these new findings through go-to-market strategies because customers are expecting changed business behaviors. The target market changed due to the pandemic. Companies like Prose understand these expectations and act responsibly by revisiting the target market. Prose is a custom hair care brand that offers consumers freshly-made products to meet their unique hair needs. The customer journey starts with a holistic consultation about hair type and texture, lifestyle habits, environmental exposure (pollution, UV, humidity, hard water, and wind), and even diet and stress levels. According to Crunchbase, the startup raised $25 million from 8 investors. Use cases changed a lot, and they influenced offerings, which makes the target market happy.
This young, founded in 2014 business decided to donate $30,000 to NYC Health + Hospitals. 100% of this donation will go towards purchasing food for frontline NYC healthcare workers and their families, buying more protective gear, and covering hotel and transportation expenses. Furthermore, the company settled the production of 21,000 bottles of hand sanitizer to donate to various NYC + Paris organizations. Prose redesigned the company value matrix as executives learned that current and potential customers are waiting for the reasons to buy.
Companies like Prose understand that product or service need changes, and freshly "baked" reasons to buy will influence gtm strategy for a long time. They keep launching new products, redesign their goto market strategy and business model, and carefully study buyer personas. Pose is on track to hit $50m in revenue in 2020, and the management understands that social responsibility is essential to make this progress happen and sales strategy compelling.
Four actions, which go-to-market strategy should provide that can help companies influence potential customer behavior and meet target market pain points:
In the galloping digital world, most users are hyper-connected and consume content on multiple platforms and devices. Companies should start a conversation on various platforms and involve in the discussion. Customers don't want to look for a channel, and they expect to use the channel they are familiar with. Whenever you are about to launch your product or service and are at the early stage of your go-to-market effort or are at the scaling stage, the ability to answer "the call" everywhere is essential.
Orvis is a sporting goods retailer with an exceptional approach to understanding its target audience pain points and knowing the most effective ways to communicate with the customer. Orvis leveraged a vast data strategy to discover that its target audience consisted primarily of 50+ customers. Huge discovery for any gtm strategy and product performance. The company understood that this demographic hasn't fully adopted digital technology, so to help, Orvis gave their employees tablets with CRM and eCommerce tools pre-installed. These tools can order out-of-stock products to the store and charge customers for both online and in-store purchases. If customers need assistance with a product, they can find a rep and use their tablet to learn more about an offer. Thanks to this, representatives can respond to pain points in real-time, shrink the waiting time dramatically— all that modern product marketing needs.
If companies want to influence consumer behavior, they need to make emotional connections with them through positive customer experiences. It is something that should be embedded in a pandemic product marketing strategy. And that's possible when consultants, sales representatives are available for their consumers 24 hours a day, and 7 days a week to resolve their queries and address any pain point. A study found that 42% of customers who complain in social media expect a response within 60 minutes. Further, 57% expect the response time at night and on weekends. Especially when a new product is in the game, the answer time plays an important role. For instance, customers might need clarification about product pricing strategy or new product description.
MIT's Computer Science and Artificial Intelligence Laboratory ran an experiment called "Predictive Vision". Researchers trained the deep learning system to predict whether characters in scenes from shows like "The Office" would hug, kiss or high-five. After observing more than 600 hours of YouTube videos, the system was able to predict the action 43 % of the time. A video is a powerful tool for collecting data and feeding gtm strategy with discoveries, patterns, and insights. These findings can enrich digital product and help to redesign key features.
Habits can form when a consumer begins to associate a specific behavior with a particular context; eventually, that behavior can become automatic. To help turn actions into habits, companies should identify the contextual cues that drive the behaviors. A contextual cue can be a particular task, time of day, or object placement. For example, more consumers are keeping hand sanitizer and disinfecting wipes near entryways for easy access as a reminder to keep hands and surfaces clean. Product packaging and marketing that reinforces put-it-by-the-door behavior can help consumers sustain the habit. Product and service get redesigned features, essential to address a specific pain point in the pandemic era.
Some companies may need to identify—and create—fresh contextual cues in their marketing activities. Before the COVID-19, a contextual cue for chewing-gum consumption was the anticipation of social interaction—for instance, before going to a club, while commuting to work, and after smoking. As social occasions have waned during the pandemic, a chewing-gum manufacturer must look for new contextual cues, focusing mainly on solo or small-group activities, such as gaming and crafting. Gum manufacturers could consider designing packaging, flavors, and communications that reinforce those new associations. The product stays the same, but marketing and sales need to be adjusted to the market and the market strategy.
Control the math backward to improve pipeline percentages and run scenarios with more variant outcomes. After all, an opportunity with a 70% chance remains $0 until it converts. The sales strategy should be revisited then.
Separate the most critical leads with strategic customers from more speculative opportunities. Customers currently want to minimize risk, so they'll tend to favor trusted partner and vendor as well as product. Prepare all available resources to clear blockages and keep the most critical deals moving through the pipeline until they convert to a product purchase. Address pain point precisely and make sure your marketing team is available 24/7 in as many channels as you can afford.
In high uncertainty conditions, decision-making speed increases dramatically, as does the demand for information needed for transparent, concise, and prescriptive guidance to the front lines. Make small decisions fast, and your gtm strategy adjusts rapidly. If your process of getting new products or modified products to the market gets stuck, decide, shape the marketing project, and press the green light. Run the business with Agile principles—daily stand-ups, distributed discrete actions, and rapid micro redirections within the product team. Keep your product team small and running one- to two-week sprints to avoid whipsawing the front line. Also, dedicate a few people to run a sales process —a process that can create market-ready packages composed of specific offerings to target segments and incentives, marketing support, sales collateral, and training. Think about it as the chance to win a new market by rebuilding product or service at a fast pace.
First, make roles and accountabilities crystal clear, responsibilities transparent, and metrics objective. Ensure each strategy and operations team member knows where to be on the field and how to play the game. Strong directives and coaching-based support will help mute sales team, product team, and strategy team anxiety.
Second, keep things simple, no politics, play straight, be honest, and keep up the morale. Prescriptive sales plays should have simple offerings and messages. It doesn't matter whether it is a redesigned product or service or existing ones - marketing strategy in the pandemic times expects fast, bold moves. Postoplan.app is a great product strategy example. The social sharing platform quickly redesigned the pricing strategy and made deals with VentureBeat to increase sales and put the product in front of the "market" eyeballs.
Experiment and if you find something works, scale fast. My customers, an eCommerce company, changed the product features, messaging, and pricing structure after studying buyer personas to make it more suitable to the current environment, then mobilized the inside sales team to market all in under 2 weeks.
Update frequently map competitors as the landscape is changing fast now. Here is the landscape preparation matrix explained. Most companies have a rough sense of their markets' size, but they stopped tracking the landscape.
Key players influence your long term product and service performance. You might not notice the change in the short time, but you will see your P/L reacting after 3 - 9 months. Rethinking your competitive advantage and revisiting your business planing important more now than ever. It also raises the need for reviewing the return on investment for lead generation, sales-play deployment, and account-based marketing.
A crisis-driven market strategy demands boldness and learning in crafting gtm strategy and marketing plan
Every business understands how to lead new digital initiatives in "ordinary" times, but very few do so at the scale and speed suddenly wanted by the COVID-19 crisis. That's because in ordinary times, the customer and market punishments for widespread "test and learn" can seem too high, and the organizational obstacles too steep. Finance departments keep a tight brake on the funds pedal, which doesn't give gtm strategy speed. Customers are often reluctant to adjust to different ways of doing things, with traditional adoption curves reflecting this inherent inertia. It influences the gtm strategy comprehensively but also can destroy marketing plans.
Moreover, organizational culture, with its deeply rooted silos, limits agility and creativity with collaboration. As a consequence, companies often experiment at a speed that fails to match the rate of change around them, reducing their ability to learn fast enough to keep up. Eventually, sales and product performance are exposed to turbulence.
Silos will make your life more problematic in pandemic times. Your gtm strategy needs to adjust as quickly as possible, and silos can make it almost impossible. McKinsey's research shows "bold moves to adopt digital technologies early and at scale, combined with a heavy allocation of resources against digital initiatives and M&A, correlate highly with value creation."
One proactive business response to COVID-19 is to offer the same (or similar) products and services within a different distribution channel to current and potential customers.
Chinese cosmetics company Lin Qingxuan was ordered to close 40% of its stores, including all of Wuhan's locations, sales fell by 90%. However, the company redesigned the customer experience and marketing strategy, and reskilled its beauty advisers as online influencers, leveraging digital apps such as WeChat to engage customers virtually and boost online sales. They played smart, and on Valentine's Day, Lin Qingxuan launched a large-scale, live-streamed shopping event featuring more than 100 beauty consultants; one adviser's sales in just two hours equaled that of four retail stores. The company's sales climbed 120% over last year's without changing the core of product or service. They didn't even introduce an improved product.
COVID-19 is deadening the demand for many products and services, resulting in an underutilization of organizational infrastructure. At the same time, sales numbers in other parts of the business are snowballing. As soon as it became clear that hand sanitizer was in short supply, enterprises such as LVMH (perfumes), Pernod Ricard (alcoholic beverages) switched to producing new products within a few days, and they quickly crafted adjusted sales strategies, redefined target markets, and value matrix. Carmakers such as GM and Ford have modified production lines to manufacture medical devices like ventilators. With cars' sales in China down 90%, automotive giant BYD Co. switched to producing millions of surgical face masks per week. Eventually, the customer received what was expected, product or service showed up on the market - this is what change means. Thanks to quickly adjusted gtm strategy, BYD introduced refreshed value, not only to the customer but also to investors.
Hotel chains such as Best Western have pivoted, offering their rooms to hospital staff and COVID-19 patients. Think about what type of assets your own, which can be quickly converted to a different offering. You'll need to redesign product or service, but this is for a customer, and the market and the market always wins.
Building and running a new infrastructure is easier said than done and often requires collaboration with external partners within a co-creation process. As my customer case study shows, it can be valuable.
Amazon recently announced that it is looking to employ 100,000 employees in the USA to meet increased demand from online shoppers. Jeff Bezos' kingdom has partnered with the ride-booking company Lyft as both demand and fares for Lyft trips have fallen dramatically. Lyft supports its drivers in pursuing positions as workers, delivery people, or grocery shoppers to make additional income, and applications for Amazon openings are accessible through the Lyft driver web portal.
When COVID19 hits, another force showed up and put pressure on the Uber business model. But the flexibility is in the company DNA. The firm quickly launched a WorkHub. It's the service that helps drivers to find alternative jobs.
More than 1,000 laid-off Scandinavian Airlines employees were offered fast-track training to serve the country's health care system fight the pandemic in Sweden.
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