Make a Tough Marketing Decision
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Let’s postulate the following:
You are developing a piece of software that helps companies improve the efficiency of their business processes.
You know for a fact that your competitor is working on a piece of software that has the same proposed use.
Your budgets and marketing skills are equivalent but you have more vision than the competitor, meaning that in time, you will be able to deliver a superior product at the same cost.
You have a choice:
1) You can launch before them but incorporate fewer features and accidentally leave a small number of “rough edges”. In this case the competitor will likely launch a slightly “better” product than you.
or
2) You can add some extra features and ramp up the quality control thereby launching a more complete and polished product. Your product will be slightly superior. However you will launch second. Let’s call it a month later than your competitor.
No matter which scenario you go with, assume that your product will be noticeably superior within months of launch.
Consider that you can improve your product as many times as you want with no distribution cost and no requirements on your existing customers other than downloading an automatic upgrade package.
Which would you choose?
on July 14th, 2007 at 11:08 pm ¶
hahaha– if we are talking Web 2.0– launch first in a semi-private beta and pray for a techcrunch mention.
This question leaves too many variables. What sort of business contacts do I have compared to my competitor within the field I am targeting? Do we each have equally proven track records or are we both starting fresh? Is it the sort of product that we will be sending out free updates for? There are just way too many other considerations. Budget/Skills aren’t enough.
on July 14th, 2007 at 11:52 pm ¶
Hi Paul,
I like the way you’re thinking.
Here are some precisions. You should consider everything between you and your competitor is equivalent except for longterm vision.
You can send free updates, as many as you want without disrupting the customer’s enjoyment of the product and without creating extra cost for yourself.
Thanks for your comment, if you have more ideas, I’d love to hear them.
on July 15th, 2007 at 9:56 am ¶
I think I’d lean towards launching earlier, but be very public and open about the features that will be soon added, and offer a fairly narrow (and soon) time table for it.
That way you can still offer the features as benefits/bullets of your product, but have a label like “coming in 30 days” on the sales letter.
That’s my initial, “gut” reaction.
Great question.
…jp
on July 15th, 2007 at 4:35 pm ¶
I agree with Johnpaul here: Offering a product in a timely manner while throwing in a perspective of it even getting better fairly soon (and at no upmark for current buyers, either) would be our preferred way to go, too.
Else, you’re more than likely to be stuck with the “Johnny-come-lately” image no matter if your competitor’s earlier product is crappy which is hard to shrug off effectively.
Unless it’s about more than just a few minor improvements or embellishments - if it’s truly phenomenal additional functionality your competitor isn’t likely to implement anyway, better to let them soften the market first and then offer people switching over to your superior product a substantial rebate: That will help you substantially save on marketing efforts.
E.g. we’re getting about 70% of our new clients from a group of people who have extensively tried out one of our competitors’ products (which costs only about 10% of what we charge) and became dissatisfied with it for various reasons. Thus, we cordially wish our competitor the best of success (they’re actually spending thousands on high profile marketing which we aren’t, heh) - because over the long haul it drives people in droves to our own offer. Enlightened self-interest, and all that…
on July 16th, 2007 at 1:48 am ¶
By an amazing coincidence, I just had this discussion with the Creator, of a software product known to EVERYONE who would read this blog.
(I have to keep his name and product confidential as I write this - but the next time I talk to him, I’ll refer him to this post and ask if he’d like to post a comment himself!)
He chose the latter. His competitor launched first, and being the ONLY product of its kind available in the Internet Marketing niche at that time - they charged Double the eventual “going price”!
He launched a significant time later (6 months if I recall correctly), at what became the “going price”.
There are now several competitors on the market, yet his product is one of the TOP TWO sellers. So in his case, launching late with the BEST product, did NOT hurt him, in the long-run.
Furthermore, his product continues to rank at the top, despite a recent run of “cheapie-competitors”.
He has maintained his committment to be the “best product of its kind” - and it HAS paid off.
Interesting…
on July 16th, 2007 at 6:19 am ¶
Hi,
Thanks for your comments.
JohnPaul: I lean towards this also. The idea of giving exact dates for new features is strong.
Fantomaster: Haha, I can see how that would work for you. I also think your premise is correct. If the product is in the same category, I want to be first. Superbe quality is a powerful asset but it can be hard to pry customers away from an inferior but familiar product.
When your competitors are disapointing their user base, they can be your best marketing asset of all.
Ray: You bring up some strong points. It’s really not as clear cut as I’d like it to be. Look at the history of search engines. All the “first comes” got clobbered by the new guy.
If the new guy had come first, the others would have been forced into early retirement (very early).
on July 17th, 2007 at 7:26 am ¶
I’d launch in public beta, and then slam my competitor with a gamma a month after they follow-up — i.e. two months after I launched. That is, of course, if these time frames are reliable. If 1 months turns to 3, that might be fine. But 12 or even 6 could be debilitating.
on July 17th, 2007 at 7:34 am ¶
Hi CT,
The more I think about it, the more this seems the plan to follow.
A well calculated beta with a transparent and orderly roll-out of features would probably get the best of both worlds…
thanks for your comment.