Get Out of the Gate Quickly By Adding War-Gaming To Your New Product Launch Strategy
Do you find that your sales right after a new product launch often lag your forecasts? You are not alone — most successful businesses and products require some kind of adjustment or pivot prior to gaining a foothold in their market. Even Lexus, which seemed to burst onto the North American market, had lackluster results post launch before a major strategy move.
But what if you could make these pivots a part of your new product launch strategy, before entering the market, without burning much budget and time? We’ve seen many companies meet and exceed their early-stage forecasts by conducting a time-efficient, low-cost strategic exercise called war-gaming prior to launching.
What is War-Gaming?
Like it’s counterpart in the military world, war-gaming in a corporate setting simulates competitor responses to your company’s new product. In addition, business war-games also attempt to model customer response to your offer – and to competitor’s likely attempts to diminish it.
The participants in a war-game usually include 4-5 groups of 4-5 people each. Specially-selected people from your own company fill these groups, with some optional exceptions (see “Best Practices” below). Each group represents either your own company (typically the product launch team), a simulated group of customers (usually people who have been customers in the past or know them well) and two groups representing key competitors (if possible, partially manned by people who worked for these competitors in the past).
How Does a War-Game Work?
Pre-work: Teams are instructed to do a little bit of research prior to the session. They spend 30-minutes preparing for their role, either individually or as a small group, using some templates specially-designed for a war-gaming session. Their simple objective is to be able to play their role as realistically as possible.
The high-level flow of a war-game goes like this: teams take turns presenting their value propositions to the customer group. Competitor teams tout their competing solution and attack the new product. Customers score each presentation, again using a specifically-designed scorecard (we call ours the “Ability to Win” template) to provide feedback to the teams.
Teams meet privately to re-consider their approach, positioning, pricing, and offer. Rounds 2 and 3 follow in a similar manner, with the customer group again re-scoring the presentations and providing feedback. Typically, some new market scenarios (e.g., two competitors merge, etc.) are introduced to add some “spice” to the later rounds.
The final presentation in Round 3 is done by the company launch team. With the benefit of hearing all previous presentations and feedback, the team will hone in on an approach that has been pressure-tested, “competitor-proofed” and market-ready.
Finally, all participate in a debrief to capture, summarize, prioritize and refine the new approach that the war-gaming inspires.
Some War-Gaming Best Practices
After conducting numerous war-games across different industries and in many different countries, we have discovered the following are 3 of the most crucial best practices:
- Conduct your War-Game virtually instead of live. By scheduling several shorter war-gaming sessions instead of one long, 1-2 day live session, we’ve seen much better results. All teams really benefit from the time between sessions to refine their approach from round to round.
- Invite real customers to serve on your customer team. As long as they are representative of your target segments, you can’t beat this level of realistic feedback.
- Have the customer panel keep objective score and provide, small – even “cheesy” — prizes to the winners. The scoring model we use provides specific feedback that is helpful to the teams as they re-calibrate. And the $1.50 prizes we award to the winners of each round are fought for voraciously by the teams, ensuring their full engagement!
How To Make Your Third Move First
War-gaming reveals how a company’s initial approach can (and will) be effectively neutralized by competitors. In fact, in our experience, a company’s “backup plan” presented in the war-game can often also be a non-starter.
It’s usually the third war-gaming round that provides a “eureka” moment for your company’s product team. They realize that they would have lost valuable post-launch time re-trenching. Now they can go to a winning strategy right away and get out of the gate quickly. In essence, they will make their third move first.
From Late-to-Market and Undifferentiated to Ahead of Plan
Here’s an example of how a war-game got a company out of a tough situation. Our client, a pharmaceutical company, was about to introduce a new drug that treated a rare cellular disease. Unfortunately, the product launch had been delayed significantly.
In the meantime, several other companies had developed medicines that reduced the advantages of our client’s drug. Nonetheless, the company’s executive team insisted on launching the late-to-market, undifferentiated product.
Panicked, and without the time to do any further market research, the product team decided to conduct a war-game. The process uncovered a key insight that led to the product out-performing it’s objectives.
The company launch team’s initial strategies of (Round 1) trading on their company’s overall brand name and (Round 2) focusing on their patient support care line as a differentiator were non-starters. However, the Round 2 dialogue between the company launch team and the customer team about the drug’s underlying structure revealed an underrated advantage.
The company’s drug had a plant-based makeup, whereas the competitor’s product harvested chemicals sourced from the pituitary gland of rats! Focusing their message in Round 3 on the “cleaner” nature of their drugs biology proved a winner to the war-game company launch team –and in the market.
War-gaming led to the company developing a respectable market share with a product that seemed to have very limited chances for success. Most products have discernible advantages and can expect even better results.
Please contact us if we can help you set up your own virtual or live war game as part of your new product launch strategy. The approach also works well when facing significant new challenges in your existing markets.