A fresh perspective on marketing can completely change a company’s perspective of its own product positioning and lead to stunning improvements in revenue. yorCMO’s cofounders Jay Gordman and Joseph Frost recently analyzed this phenomenon in a discussion about a client that acquired a competitor. As fractional marketing consultants, the yorCMO team was able to detect a problem with market pricing and product positioning that the client had not seen and then lead them through a complete business model change.
Listen to the conversation here: https://vimeo.com/383530544
“This company merged with another company that used the same green, chemical-free cleaning technology, so through the acquisition they were able to build a better offering,” Jay said. The company shifted from a direct-to-end-user business model to a distributor model, because it gave them the ability to leverage the company’s strong relationships with the distributors.
However, during interviews with buyers and distributors, the yorCMO team discovered that the product, a large one-time purchase of a chemical-free cleaning system, was not advantageous for either distributors or end-users. Buyers wanted to avoid a large purchase and distributors wanted a monthly recurring income stream like the one they had with traditional cleaning products.
“[This realization] was a game changer from the very minute of that conversation in our foundation session, and it all came from the buyer interviews during the yorCMO audit,” Jay said. “We sat down with the team and talked about ways we could put the system into an economic model where it was a monthly recurring revenue, such as a rental program.”
Making Product Positioning a Priority
The buyer interviews clearly demonstrated a need that the company had not seen. Jay explained that the unique yorCMO interview process helps a marketing team truly understand what triggers the purchase. The interviews did confirm a genuine need for the company’s chemical-free cleaning products. “But when we asked [buyers] what criteria they used to evaluate options, we realized potential customers were not only comparing the company’s product with other chemical-free cleaning options. They also were comparing it to chemical programs that used a different pricing model,” he said.
As a result of the interviews, the team realized the market for the large one-time purchase of a chemical-free program was very small and they needed to “go where the customer’s mindset is today” and make some changes based on how buyers evaluate the purchase. “This was absolutely imperative in terms of learning how [the client] could change their positioning,” Jay said.
The company made product re-positioning a priority and within about 90 days went from the conversation in the yorCMO foundation session to building a leasing program and becoming the largest nationwide program for leased green-cleaning programs. The new program was introduced at a major trade show.
Early Sign-Ups and a New Key Metric Further Support the New Product Positioning
In addition to helping restructure the product, the yorCMO team suggested the company immediately begin signing up distributors, even before the leasing program was ready to go. More distributors signed on in 90 days than ever before. “We blew it out of the water by about 25 to 30%,” Jay said, “and this quarter were doing the same thing. We are way above even last quarter’s distributor sign-up because [distributors] are excited to have a new way to offer a chemical-free program.”
“Those numbers are amazing given the fact that 90 or 180 days before, there was no program like this,” Joseph added, “and without a professional CMO coming in and implementing buyer research and finding these insights, it probably would have just been business as usual for the company.”
Jay said the yorCMO team also was able to help the company see that the key metric in their business is not the number of distributors they work with. They also must monitor average volume of products sold during the year. “We can’t just sign up distributors and rest on our laurels,” he explained.
The fractional marketing team helped the company change their mentality from just selling to distributors to helping distributors become excellent at selling the product to end-users. Jay said this is called a “sell-through” sales model. It involved a complete change in marketing strategy and marketing, sales and training materials to help distributors be successful.
To learn more about how fractional marketing professionals at yorCMO helps its clients achieve stunning results with fundamental sales and marketing changes, including shifts in product positioning, contact firstname.lastname@example.org or visit his bio at yorcmo.com
About the Author:
Jay is co-founder of yorCMO.
Jay also founded Webtivity Group to help companies break through the confusion of how to effectively use their website and digital marketing efforts to meet their business objectives.
Jay is a successful digital marketing and ecommerce professional that helps companies across multiple industries grow revenue using a broad range of strategies. He has a deep understanding of the challenges companies face when trying to balance the diverse components of growing revenue across all marketing channels. He has been called “Tactegic” for his ability to blend strategic thinking and tactical execution to achieve measurable results.