2 May 2012 by Sami
Old school marketers remember well the Four P’s of Marketing: Product, Price, Promotion and Place. Of course, they still apply today, but all of the P’s have become so much more involved and complicated than they once were.
As BtoB marketers, we spend a lot of time defining our product, price, promotional strategy and the channels we will sell through… but I have realized, that we spend too few cycles on how we are going to package our whole solution to the client.
For many, we think of packaging as the physical box something comes in, and yes, this is packaging. And, we know that certain companies such as Apple take great care in building a great package for their products. In fact, it is part of the product. Many might argue that most of Apple’s great products are the result of a brilliant packaging exercise of various technologies.
Regardless, I don’t believe most companies take the packaging exercise as seriously as it needs to be taken. They build product, they determine pricing, they create a promotional plan, and then they start selling. But, packaging itself is often the glue that holds these “P’s” together. How one goes to market is intricately tied to the “package” it will be delivered in, or for non-physical products, how it is delivered.
Software products are an excellent example where packaging is critical. For example, which features belong in which solution at which price point? Defining this is a packaging exercise. Oftentimes, we have found that not thinking about how the customer wants to buy your solution will greatly limit your flexibility in how you can price it and the channels you sell it through.
Rather than waiting until you are building a go-to-market strategy before considering packaging issues, I would argue packaging needs to be thought through early in the product development cycle and be fed by 1-on-1 customer research. By digging into the customer mindset, we can start to understand what features are considered the basics and which are advanced – we also may start to understand how we can better package and price our solutions to where clients see the value. This will not only increase the sales kill-ratio, but will extract greater revenue from customers. It will also help us architect our products better to serve more customers.
When our product is packaged appropriately, we can segment our market better and tailor specific packages to different needs of different target groups or segments. That can only lead to greater customer acceptance, which should be music to any marketer’s ears.
So don’t forget to think through the packaging of your BtoB solutions early in your product and marketing planning. I am off to lunch now… time for me to go eat some dead, cold fish. Ok, I mean Sushi in a nice restaurant, but it goes to show that packaging does make a difference… I would never buy a package of dead, cold fish!