3 Steps to Software Market Entry Success

There is much money to be made in software and tech. AI and innovative paradigms are booming! So, you want to leverage your software or tech offerings to expand in an adjacent market. But how? What is your initial target market niche? Which flagship sales will you reference? How do you create an effective B2B sales channel? Will it work? Will you be profitable?

However, most market entry efforts fail. The software and tech market is attractive yet demanding. The volume of marketing and PR by existing players is staggering. Having a thoughtful strategy is not enough to launch an broad implementation effort. You need to have a flagship sale or two before you invest too much cash too quickly, plus a laser focused approach!

A market entry strategy is where you define the specifics. Along with your business goals, you need to build an overview of the market niche, what software or technology subset you will sell there, and how you will achieve sales. After that work, a typical B2B market entry plan can take 9 to 18 months to implement. Sometimes longer.

Most can’t be bothered speaking with prospects and customers. Executive are very busy and technical founders dread it. So, it is quite common for software and tech businesses to start executing a set of general activities, but this approach often leads to failed market entry. It’s better to follow a proven process before wasting time and money.

Here is a cost-effective, 3-step approach to successfully enter a new market, an adjacent one.

1. Research Your Market

Market Research is a critical first step. Find a firm that has done it often and can be unattached and objective. Research may include learning about:

• emerging market trends
• customer goals, unmet needs and problems
• perceptions of similar products or competition
• your unique value proposition to win
• size and potential of the market

And, much more. The research data should yield evidence of your success. The findings will provide the context of how and why a target market is viable for your firm. You will need to learn why buyers should buy your Software or Technology, versus substitutes and competition. Firms often underestimate the degree of competition in new and existing markets.

Doing market research is critical. The worst mistake is to skip this step. Even some basic research is better than wasting time and money chasing an unknown market. Doing it yourself may lead to aspirational conclusions.

2. Define Your Optimum Approach for Market Entry

After some thorough market research, you may need to rethink how you should get your Software or Technology to market. In B2B sales, it is critical to define the whole solution and how the direct, VAR or distribution channel will add -real- value.

Why is a differentiated approach so critical? Every profitable industry is competitive. The more profit that can be extracted, the more entrants will compete for their share. Differentiation and competitive positioning is critical. You will need a way to stand out for successful market entry and sustained growth. You will need to find those points of differentiation and competitive positioning for optimal market entry. Having your firm and product position based on research evidence is paramount.

Why are the benefits (and risks) so large? The effectiveness of your market entry approach can cost you time and money. A delay of 6 months or a year, can impact 3-4 staff or more. Having an optimal market entry will accelerate early wins and improve the morale of your team. Optimal market entry approach includes defining a product scope & ideal market timing. Refining your optimal Market Entry needs to incorporate market feedback about the “whole” solution which is the most competitive for you and relevant for the customer.

3. The Quick-Win Challenge: Flagship Sales

Securing early wins is important for many different reasons – not just justifying the investment in a new operation or additional staff. Early wins builds confidence and a sense of momentum within your team and company.

That’s why chasing every market entry opportunity is a failing strategy. The sooner you can build flagship sales in your chosen market, and identify a generous number of qualified and promising opportunities, the better.

Early Flagship wins are likely to come from a combination of a good understanding of the market, an optimal market entry strategy, plus effective qualification and experienced sales execution. As a new entrant in an adjacent market or geography, you need to anticipate and be well prepared to address the customers’ questions and objections regarding your products’ capabilities and company’s abilities.

Generic sales skills and good product knowledge are obviously important. However, early Flagship Sales are critical to prove the viability of your strategy and to communicate examples of success — both externally and internally. Flagship sales help to crystalize the make-up of good prospects, what really matters to them, and how and why they will buy. Having a flagship sale or two should materialize early and before much investment in implementation your strategy. Don’t make it an afterthought!

Tony Cristiano is a managing partner at Pivotal Arc (www.PivotalArc.com) focused on successful Market Entry. He is a hands-on software & technology business leader with extensive corporate and entrepreneurial experience. He has successfully launched start-ups and developed a proven track record of sales growth and business development. His career includes senior roles at IBM, Technicolor, Pratt & Whitney, plus entrepreneurial firms. Tony has a Computer Science degree from U. Waterloo and completed the Executive Program at the Anderson School/UCLA. You may connect here: LinkedIn.com/TonyCristiano.

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