MOST COMMON PROBLEM
SOLVED
What we most often help our clients to solve.
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All of the problems listed below have complex origins. There may be a number of reasons why an undesirable condition has arisen. In practice, it is almost always a combination of these. It is therefore not possible to choose one particular solution to resolve them. This would only lead to partial successes. It is necessary to carry out a comprehensive analysis and identify all the causes of the condition and to resolve them gradually, according to their impact on the results.

We launched a new product, but it’s not selling as well as we expected

The company has had several months or a year of sales of the new product, but sales have been very lukewarm. It is only once every few dozen times that a customer is acquired. Sales are pushed primarily by salespeople, with marketing playing a more minor role.

Possible causes

  1. The product team neglected to analyze and define the target groups and verify their needs (Are the needs we want to satisfy real? Do the target group we have identified have these needs? Is this target group large enough to sustain us?).
  2. The product team did not assess the importance of each target group’s needs and by setting the product to answer the needs of less important ones. As a result, customers do not see as much value in the product as the team anticipated because it does not address their most important needs.
  3. The sales team assumes that everyone in the target group is ready to buy. They don’t take into account that even within the target group there are differences in the decision makers’ approach to new products (Simon Sinek has a great discussion on this topic). They don’t respect the time-tested formula defined by the See-Think-Do-Care framework. Instead of looking for customers ready to buy, they attack anyone who might fall into the target group.
  4. There is no communication strategy. If there is any promotion, it is not set in the overall context, which makes it usually poorly targeted and does not contain the most important messages (given the readiness to buy of the target groups).
  5. The team does not work with feedback from the market. It has signals of what bothers individual target group representatives, but does not take concrete steps to modify the product based on these findings.
  6. The product team is not in contact with customers and the sales team does not pass on enough information to make further adjustments to the product.

Approach to the solution

In this situation, we want to know in detail how the team arrived at the current product design. Whether it was a spontaneous suggestion by the team or whether some market research was done before the creation. Whether the product team involved a representative of the key target group throughout the creation. How the target groups are defined, what the company knows about them. Almost always the preparation is very weak in these areas and we have no choice but to go to potential customers and find out their real needs during implementation. We want to know if the company has mapped out the competition. If not, we provide the competitive analysis. We find out why the company prefers 100% business over marketing and what marketing channels it has worked with so far. We suggest a new communication mix.

Sales of our long-term successful products are stagnating or declining

The company has not had a problem selling its products or services for a long time. It may well have been one of the big players in the market. However, the current situation is different and the company’s sales are slowly declining. In order to maintain as much of its past sales as possible, it is resorting to price cuts, which are eroding its margin.

Possible causes

  1. The company is not investing enough in enhancing the value delivered to customers. Each firm has two options in terms of competition. Either it increases the utility it delivers to customers through its products or it gradually lowers the price. The customer perceived value of the product or service must either remain the same or grow over a longer period. Given competitive pressures, this can only be achieved by increasing utility (e.g. through innovation, product line extension, better accompanying services) or by reducing price while maintaining utility.
  2. The firm has underestimated promotion. There was a managerial error where management thought that the company was already sufficiently well known and there was no need to invest so much in promotion. However, the knowledge available to modern marketing from neuroscience speaks inexorably. Memory traces in the minds of customers need to be reinforced permanently, otherwise they are displaced by other information over time. Promotion cannot be limited if we want to achieve the same or better business results as before.
  3. The competition has come up with a better value proposition (better product or lower price) and the company has not responded flexibly enough. It is now experiencing customer churn.
  4. A previously unintended substitute has emerged in the marketplace that has driven the original solution to a particular need out of the market. Consider the now classic example of traditional photography versus digital. The need here was to “immortalize memories”. The solution was either classic photography or digital photography. The substitute to classic photography won.
  5. The needs of the company’s target audience have changed. The company did not perceive this change and did not adapt its offer to it.
  6. The sales and marketing team and the people responsible for the products were not passing on information. Some departments are isolated from the market, probably their representatives have not reached customers for a long time. The business operates in isolation.

Approach to the solution

First, it is necessary to determine whether the cause of the situation is an improvement in the competitor’s offer, the entry of a new competitor or substitute into the market or a change in customer needs. For this reason, we carry out a market and competitor analysis. Depending on the identified cause, we then recommend the next course of action. This may consist of modifying the existing offer (in response to a change in competitors’ offers), developing a new communication strategy that defines itself in relation to substitutes, or designing products that reflect current customer needs.

Competition is taking our customers, we are failing to attract new ones

The company is losing customers and its salespeople learn that they have switched to a competitor. New customers are not coming in either, and the competitors are again winning any tenders.

Possible causes

  1. The competition came with a better value proposition (better product or lower price) and the company did not respond flexibly enough. It is now experiencing customer churn.
  2. The company is not investing enough in enhancing the value delivered to customers. Each firm has two options in terms of competition. Either it increases the utility it delivers to customers through its products or it gradually lowers the price. The customer perceived value of the product or service must either remain the same or grow over a longer period. Given competitive pressures, this can only be achieved by increasing utility (e.g. through innovation, product line extension, better accompanying services) or by reducing price while maintaining utility.
  3. There is no regular analysis and monitoring of competitors’ activities to detect changes in the competitors’ marketing mix.
  4. If a department (typically marketing or sales, when it receives offers from competitors from customers) already has such information, it does not work with it at company level and does not adapt the marketing mix to the newly identified market situation.

Approach to the solution

You need to find out which competitors have changed their offer and how. We are therefore preparing a market analysis (of all key competitors). Based on what changes have taken place in the market, we propose a way forward. This may consist, for example, of adjusting the product offering or changing the communication strategy to better differentiate the company from its competitors.

We’re in a price war that is destroying our margins

Some of our competitors have started cutting prices or running big discount campaigns, or the company has decided to do it itself. Price wars usually end up destroying the market or bankrupting firms (or driving them out of the market). However, the outcome is never positive for the competing firms; only customers benefit from this state of affairs for a while. However, this is a short-term advantage, because most firms will leave the market after a while due to unfavourable conditions, which will significantly reduce supply. And even the firm that stays must logically compensate for the loss of margin by reducing the quality of the product or making some adjustment, which is usually to the detriment of customers.

Possible causes

  1. Both the company and its main competitors have decided to strengthen customer benefits by lowering the price of their products. Other players in the market are reacting in the same way, thus spinning a spiral to the bottom (in English, they have a nice name for it – race to the bottom). In this case, it is a bad management decision, where management chooses the path of discounts or price cuts rather than enhancing customer value through innovation and improving product offerings.
  2. Some of the competitors have started to engage in ‘predatory dumping’. It started selling its products or services at prices below its costs in order to destroy its competitors. There is not much defence against this practice except cooperation with the Competition Authority. Indeed, predatory dumping is one of the illegal practices in the Czech Republic. Of course, you can choose the same strategy if resources allow, but you run the risk of being penalised.

Approach to the solution

The first thing to do is to assess who started the price war, which competitors have already joined and what position the client company is in (big player, challenger, etc.). We then work with the client to find all the ways to increase customer value not by lowering prices but by improving the product offering (expanding the number of add-on services, better service, better availability, etc.).

We want to launch a new product that succeeds (and we want to do it in the best possible way)

A new company is being created (a startup in the ideation or product development phase) or an established company is tackling the development or introduction of a new product to its offering. The company’s management or product team wants to make sure that they have done their best to make the product a success in the marketplace and that the investment made in the development or launch has paid off.

Approach to the solution

The solution depends on how much work the client company’s team has already done – in the form of analyses of target groups and their needs, market analyses (competing solutions and substitutes), and feasibility and sustainability analyses (can a solution to a customer need be found with an acceptable price for customers and a long-term sustainable margin for the company?). If these analyses are not done by the internal team, we handle them (but they have to be done). We then participate in the development of the product corresponding to the findings. Most often using lean startup methodology and regular interactions with customers during development (the so-called “create-evaluate-learn” loop).

WHATEVER YOUR GOAL, WE ALWAYS START OUR COOPERATION WITH A FREE INITIAL ANALYSIS

The analysis takes the form of a meeting with the owner or CEO of the company or other members of management. It takes no more than half a day, is free of charge and does not entail any obligations or commitments for you. It helps us to uncover any potential challenges that could hinder the achievement of your strategic goals and the fulfillment of the common goal of cooperation.

Request a non-binding initial analysis

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