MISTAKE #49: You aren’t preparing for war
I’ve previously used the analogy that retail is war. You need to fear your competition if you hope to successfully launch your product.
But you also need to dig in and realize that few wars are won in a single battle and many are fought over years.
THE THIRD-YEAR DEFEAT
Enough of the clients I’ve worked with have experienced the following that I’m confident is a general principle:
Through hard work and a lot of luck, they gain distribution.
They struggle through numerous business challenges during the first year, exhausting everyone working on the business.
In year two they start to operate on a more stable footing. The lessons learned in year one are reflected in significantly improved planning and execution.
And then, in year three, their business crumbles as sales are down double digits and other companies launch competing products supported with bigger marketing budgets.
Once this has been experienced a few times, the pattern makes sense.
Competitors tend to be slow or risk-averse when launching new products. But they don’t want to give up shelf space or sales and ignore opportunities to grow their own distribution.
In year one, a new item might be a surprise or a novelty to other vendors. Sales typically aren’t that great as it tries to get established and makes lots of mistakes.
In year two, that new item might start to show up on competitive sales reports or might have even gained more distribution.
By year three, competitors are well aware of the product’s presence. Their sales or distribution have grown large enough to be meaningful to others.
Seemingly overnight, lots of other companies have developed their answer to or version of the same product. And they’ve probably made some nice improvements or expanded one product into a larger assortment of items.
A product that had grown for two years while largely under the radar suddenly finds itself in the crosshairs of larger, better-resourced competitors.
And few are prepared to defend against the attack.
FIGHT TO WIN THE WAR, NOT THE BATTLE
Have you experienced this same storyline yourself? It is new news that sounds impossible?
I know you’re probably working around the clock just to get a solid foundation under your new product.
But please don’t forget this story. Don’t be yet another company that wakes up in year three wondering why the bottom fell out of their business.
If you’re not doing annual business planning that extends out at least three years, make time to start doing it this year.
If you’re one of the few companies planning this far ahead, make sure you anticipate fighting a pretty big battle in year three.
If you need help developing your longer-term strategy or want help preparing for this battle, let us know. You’d love to make sure year three is the best, not worst, year yet for your business.