By Ian Richardson, Managing Partner, Richardson & Richardson Consulting
Market penetration strategy is a loaded topic – one that I’ve written about before on this website. Closely related to the concept of red ocean vs blue ocean is the concept of first to market or best in class. Simply put – do you want to pursue a strategy of being the first into the blue ocean space, or the best at what you do?
Starting off with a metaphor
Penguins are funny birds. If you’ve ever seen the movie “Happy Feet”, or any nature documentary ever around the birds, you’ll know that they tend to “crowd” at a cliffside. They’ll stand around, waiting for someone to make a leap (or get pushed from time to time) into the water below. If no blood circles up, they’ll all dive in after, having seen that there is no danger lurking below. None of the penguins want to be “first to market” in this scenario.
First to Market or Best in Class?
The concept of first to market or best in class may not seem like they’re diametrically opposed, but experience has shown otherwise.
First To Market is a speed based “play” – You are trying to get into a space where there is no competition, at least none to be concerned with, for the product or service you are building. By getting in early and running with a brand awareness and education campaign, you can create demand for your service in the market. Since you’re the only game in town, people are going to opt into your sales funnel to evaluate your offer and purchase it if it solves for their objectives.
Depending on how long it takes your competition to:
- Become aware of your offering
- Evaluate the market opportunity
- Put together a strategy to pursue said opportunity
- Execute against their strategy
You could “own” the space for quite some time. Through this ownership comes profits and growth. Depending on your ability to service demand and continue your efforts at recruitment, you can create an effective monopoly in the space. However, if you rest on your laurels, you open yourself up to disruption and displacement from those who have observed your successes and failures and pivoted their offering to take advantage of your shortfalls.
Best in Class is a value based “play” – You are attempting to create differentiation through your understanding of your customers, their pain points, objectives, and industry needs that it doesn’t make sense to pursue another option. The “value” you deliver far outweighs the financial investment in partnering with your firm, and displacement of your organization becomes difficult at best.
When pursuing this sort of strategy, you’re focused on displacement versus disruption – your offering is known about and established in the marketplace. People will need nurturing and follow up to properly move through your funnel. You will need to have a multiple medium, multi-touch value presentation marketing strategy to ensure you get a seat at the table when their business opens for bid. Your sales team will need to be experts at discovery techniques and consultative sales to be able to show why you’re different.
Which method is best?
In this scenario – I get to use my lawyer’s favorite answer of “It depends”. I always hated it when I would be told that, but I find it to be the best counsel I can offer.
Choosing a go to market strategy is a big decision, and not one to be made in a vacuum. The following list of considerations may prove useful as you consider the path forward:
- Weigh out the pros and cons for each strategy, as well as inventory your capabilities to pursue each one.
- Ask the leaders in your business for their insight and counsel.
- Evaluate each strategy against your current mission, vision, core values, and strategic performance drivers. Which aligns more with your company?
- Look at the turning points in your organization? Have you recognized successes or failures from previous attempts?
- Look at the competitive landscape. In your judgment, are any of your competitors likely to be pursuing a similar strategy? What is your assessment of their progress and capabilities of doing so?
First to market and best in class strategies are both valid, successful methods for pursuing market share capture. There are historical and modern-day examples of success and failure across both methodologies. Figuring out which strategy will best suit your organization requires perspective, planning, and alignment for your whole organization. Once you choose your strategy, you’re all in – so making sure you choose wisely must be a primary consideration.
If you’re struggling to determine the best course of action for your organization, Richardson & Richardson can help. Check out our case studies for stories of organizations that we’ve assisted with similar issues and download our white papers for deep dives on tools you can use in your organization. If you’re wondering where to start, book a complimentary session with one of the Richardsons today to come up with a plan on how to move forward.
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