Outsourced Marketing
Selling New Products
Many companies who have launched new products have been disappointed in the sales results because they failed to understand the process for commercializing new products. Specifically, they did not recognize the Sales Learning Curve (SLC) and its impact on establishing a sales force. Mark Leslie, founder and former CEO/Chairman, Veritas, the 5th largest software company in the world, developed the SLC and explains it below.
It’s a concept adapted from the manufacturing learning curve (MLC) which is widely accepted in the manufacturing sector. According to the MLC, the cost to produce the early units of a new product is high, but over time, as the productionteam learns how to optimize manufacturing and reduce costs, volume increases and per-unit product costs decline.
When the MLC is applied to sales it yields the following conclusion: The time it takes to achieve cash flow breakeven is reasonably independent of sales force staffing. It is, instead, entirely dependent on how well and how quickly the entire organization learns what it takes to sell the product or service while incorporating customer feedback into the product itself. Because the entire organization has to come up to speed, hiring a large initial sales staff does not speed up the time to breakeven, it simply consumes cash more quickly.
Rather than starting with a large sales force, a company using the SLC is better served by hiring a small team of sales execs with the analytical skills and patience to lead the company through an iterative learning process that includes the continuous discovery and solution of small but critical problems. Staffing the sales organization at a lower level in anticipation of a slower initial ramp allows the company to fine-tune the product or service, to hone it sales and marketing processes and to learn from customers about positioning, promotion and pricing, all before deploying a large and expensive sales force.
A key to making the SLC work is employing “sales” executives to manage the discovery and solutions of problems. The focus is more on learning and less on selling. Consequently, the managers executing this task must have the appropriate skill set and experience.
Accel Sales Partners has the team of experienced managers to commercialize new products and minimize the cost. Our team develops the market for your new products and, when commercialized, can turn the product over to your sales team to achieve market penetration or manage the sales and marketing on a continuous basis.
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