Strategic Growth Management Vol. 1 “Right-to-win”
I wanted to reflect and share some of the fundamental things that I learned during my career as a commercial executive. Hope you will enjoy it. I decided to put these articles under an umbrella topic of Strategic Growth Management as there is both strategy and growth in it. What can be sexier than this one :).
Starting with the good news, no matter what there is always room for profitable growth if you have a product with a “Right-to-Win”. Both in terms of volume and value. Both with creating awareness and loyalty. Both with distribution expansion and making sure of availability where it is distributed. Both with the right pricing and promotion strategy (Of course, you can also grow with a product without a clear right-to-win to some extent, or may be less profitable, if you assign the right portfolio role or there is a gap in the market place).
Bad news, there is and will never be enough time and resources to make the most out of it. This is where comes the strategy of growth. Strategy is all about selection. It is to select “where to play”, “how to win” and “enabling the resources” accordingly. Strategy is at the same time a de-selection. It is the de-selection of products, SKUs, markets, channels, activities which you did not select to focus and to be OK with it. At least for a time until it is right to select again when makes sense. Meaning you either crack the right-to-win or have the resource capacity to go to the next level in your growth journey.
Let’s dive into the elements of Strategic Growth Management one topic at an article:
a) Right-to-win.
b) Portfolio Roles.
c) Distribution & Availability.
d) Pricing.
e) Effective Promotion.
f) Go-to-Market Strategy:
- Where-to-play.
- How-to-win.
- Enabling the organization.
Right-to-win:
To me, this is the most important element of growth. All the other elements of growth equation can be fixed this way or that. All the other elements can even stay sub-optimal, and the growth will still come if this element is there. This is the turbocharger of the profitable growth. Because when this is there; there will be a consumption suction in your sales funnel and all other elements will be easier and cheaper to manage ie. your happy customers will make your communication for free (word of mouth); your distribution channels will ask for more stock of your products and make sure it is available all the time vs you try to sell them the stock and track availability, you will need less promotion spending, you can tolerate or; better to put; enjoy higher pricing etc.
So what does this silver bullet of right-to-win mean? It means you have a product or service demonstrably delivering better customer experience than the alternatives. And if you can prove this either clinically or with user reference or both to be even better in your communication strategy to drive more trial and loyalty. And if you were able to manage to lock this performance to only your product/service with a patented proprietary technology, then you can enjoy this growth for a very long time comfortably.
This is the underlying reason of success for companies like Apple for example with their meticulous attention on the design of their products and value-added services around its devices. iPhone may not be the best performing product in all smart phone functionalities vs their competition (ie. picture quality vs. @Samsung) but it is creating its moat through its impeccable design with its elegant look and feel, user friendly interface and the value-added services in Apple’s digital ecosystem around its all devices with IOS, Icloud, Apple Music etc. This makes people to pay the premium to own an iPhone and/or a Mac.
The same moat is driven by the network effects of Meta products and algorithm technology of Google
There are also less famous (than tech giants) but very successful sustainable revenue growth examples like Caterpillar Inc. who is also creating a digital ecosystem around its millions of connected equipments around the world fuelled with continuous product and value-added service innovations to better meet the evolving needs of its industrial clients in construction and mining like electrification and autonomous driving.
Ok then; how do we make it happen? It starts with understanding your customer’s need or pain point and alternative product and services available to them and create a better product or service accordingly. I am going to keep this part short I would imagine you all know very well and instead share a real-life example with you (you can check my “Billion Dollars Dilemmas” articles in my LinkedIn profile to see my thoughts on product innovation for growth). I will try to keep the names anonymous as much as possible out of respect :).
I was the commercial director of the company when we were assessing the launch of a hand dish-washing product in the market. This product has been evaluated for launching multiple times but decided not to go each time until then. Was it because the product did not have a right-to-win? Absolutely No. It was arguably the best product in the world in terms of grease cutting which was the number one need or pain point for the consumers for this type of products. The problem was not the consumer fit, it was the market fit. This product was being produced only in concentrate form and thus in small sizes and the market was more than 50% dilute and bulk size. This was causing the potential problem of negative price perception of these small bottles vs the bulk bottles of the competition. And this was the reason of all No-Go decisions before. As we were 200% sure that the product has the consumer right-to-win we decided to give it a go this time but execute the launch addressing the market-fit issue. The product was effective and visibly better than the alternatives with a very small amount per usage meaning it was price competitive per use vs the competition. What we had to do was to communicate this in an effective way to the consumers and make them try it once. We knew when they tried once they would stay with the product. I am not going to go into more detail of the launch activities but in short it worked, and the product became the market leader in 2 years and drove the market to concentrated products with it. I believe this was a good example of the power of having consumer right-to-win for driving growth even many other things are not in place.
Lesson Learned: Fixing product right-to-win with your user/consumer/client or having one already helps many other elements of your growth journey.
Hope you enjoyed it.
See you soon on the next article,
Firat
