I outlined in an earlier article some fundamental tips about how to achieve better sales. One of the principal points was that many businesses, particularly start-ups, too frequently fall into the trap of trying to market a product or service that nobody wants.
Surprisingly, the thinking behind this blunder reflects the rules of traditional manufacturing. These suggest that it’s sufficient to come up with a concept, invest in its development, transform it into something that can be sold, stockpile it and then unleash it on the public. To frame the process more succinctly: have an idea, make something and sell it.
Film buffs might recall at this juncture the mantra that compels Ray Kinsella, the central character in Field of Dreams, to carve a baseball diamond amid his corn crop. “If you build it,” Kinsella is told, “they will come.” This might work well in elegiac Hollywood sports movies, but it’s very seldom a recipe for success in the authentic realm of commerce.
We can get much closer to the required mindset if we instead render the phrase as a question: “If you build it,” we should ask, “will they come?” And to provide a reliable answer, in effect, a company has to build backwards.
Look before you leap
Sales are the ultimate validator of a product, a service or, indeed, a business as a whole. Yet building backwards essentially involves selling something that doesn’t yet exist.
This might sound as surreal as Ray Kinsella’s modus operandi, but there are ways and means. Consider, for instance, the IT sector, where it’s pretty easy to release a beta version of software and use the enthusiasm and feedback of early adopters to refine the offering.
Even in the sphere of consumer goods, it’s possible to produce almost perfect facsimiles and place them for sale. There’s no need to compromise on the product itself or its presentation: the necessary concession comes only in the form of limited market penetration. The idea is to select a few retailers, depending on budget, and measure sales characteristics over a set period.
It’s true that the unit cost will notably exceed that of the final product. But this is a price worth paying to gauge real-world potential – and, should that potential turn out to be inadequate, to think again while there’s still time.
Fear of the unknown
What we’re aiming for then, to achieve better sales is rapid prototyping and validation – a trick that’s more readily pulled off in some markets than in others. Since there are many products and services – say, those entailing high tooling costs – that doesn’t obviously lend themselves to this approach, what alternative strategies are available?
While there’s no substitute for genuine sales, there are certainly some handy proxies. Yes, consumer behaviour is best revealed through individual buying decisions, but it can also be uncovered – at least in part – by gathering such data and intelligence as might otherwise be available.
We might usefully think of this as a matter of accumulating “known knowns” and “known unknowns”. “Unknown unknowns” are the killer when attempting to formulate a value proposition, because they’re the stuff of out-and-out guesswork.
Unlike Ray Kinsella, a business can’t wait for mysteries to be solved and ambiguities to be clarified. It can’t afford to wander around in a daze and hope for a miraculous and happy resolution. The goal here is to save money, reduce risk and, above all, fully understand market dynamics.
If at first, you don’t succeed
A company that develops a novel product or service is liable to face one of three destinies. The first is to fail early enough to learn a crucial lesson, regroup and try again. The second is to fail when it’s too late to avoid a devastating blow. The third is to succeed and achieve better sales.
Even the first of these might bring costs in terms of time, effort, stock and credibility. On balance, though, it should amount to an instructive and positive experience – not least over the longer term.
The second, meanwhile, represents the kind of shock that only a handful of blue-chips can really absorb. It’s the sort of calamity from which most businesses, especially those of an entrepreneurial nature, simply don’t return.
Building backwards should significantly increase the likelihood of the first fate and notably diminish the likelihood of the second. It might even lead directly to the third – an outcome that every business desires but which, because of age-old misconceptions, precious few are able to achieve.
David Falzani MBE is an Honorary Professor at Nottingham University Business School’s Haydn Green Institute for Innovation and Entrepreneurship and president of the Sainsbury Management Fellowship.