Building Routes to Customers: Proven Strategies for Profitable Growth Book

Preface vii

Acknowledgments ix

Prologue xv

1 What Is Routes-to-Market? 1

The Route Concept 3

Example Routes: Dell, Hewlett-Packard, and Lenovo 4

Optimizing Route Costs 6

Changing the Routes as the Market Evolves 7

Routes for Mobile Phone Headsets 9

Adopting the Routes-to-Market Methodology 12

Roadmap for the Book 13

2 RTM Workshop 15

Preparing for the RTM Workshop 16

Target Market Segment 17

The Whole Solution 18

RTM Life Cycle Phase 19

Financial Data 22

During the RTM Workshop 25

Implementing the Tactical Plan 25

Summary 26

3 Market Segmentation 29

The 360-Degree View 29

Companies with a Single Market Segment 29

Companies with Multiple Market Segments 30

Product Segmentation Integrated with Customer Segmentation 32

Segmenting by Company Size 33

Geographical Segmentation 34

Segmenting by Industry Structure 35

Using Categorization to Understand What Is Behind the Numbers 37

Segmentation and Categorization: Cultural Crossroads 38

Segmentation: An Executive Decision 39

Questioning the "Business Case" 39

Questioning a Segmentation 40

Obstacles to Segmentation 42

Segmentation Is Boring for Action Freaks 43

The 80/20 Myth 43

Absence of Segmentation 44

Product-Driven Versus Market-Driven 45

IBM's Turnaround 46

Summary 48

4 Define Whole Solutions 49

Who Is the Customer? 49

The Ecosystem of Call Centers 52

What Is a Whole Solution? 54

Summary 59

5 RTM Life Cycle 61

The Adoption of Innovation 61

Disruptive Versus Non-Disruptive Innovation 63

Driving the Adoption of Innovative Products and Services 64

The Computer Industry: A Series of Disruptive Innovations 65

Disruptive Invoations inEvery Industry 67

Phases of the RTM Life Cycle 67

RTM Life Cycle Phase 1: Introduction 69

RTM Life Cycle Phase 2: Solution 76

RTM Life Cycle Phase 3: Distribution 84

RTM Life Cycle Phase 4: Commodity 90

RTM Life Cycle and Commoditization 93

Compete on Something Other than Price 96

Sell Complementary Products and Services to the Installed Base 97

Transform Products into Services 98

Innovate to Generate New Products and Services 98

Acquire Direct Competitors 100

Exit the Market 100

Summary 101

6 Constructing a Route 103

How to Construct a Route 103

Progressing Through the Sales Cycle 103

Route Construction 106

Constructing B2B Routes 107

Constructing B2C Routes 115

Routes for Consumer Auto Insurance 115

Choosing and Working with Marketing Agencies 117

Making Media Decisions 119

Marketing to Small and Mid-Sized Businesses 121

Customer Database 122

Choosing and Working with Distribution Channels 124

Choosing and Working with Resources for Step 5 Provide Support 128

How to Monitor the Performance of a Route 129

Demand Generation Campaigns 129

Compare Expense-to-Revenue Rations to Select the Best Resources 130

Marketing Optimization 131

Managing a Route Like a Factory Production Line 131

Summary 133

7 Go-to-Market Performance Assessment 135

Analyzing and Optimizing Go-to-Market Costs 135

Marketing Budget 136

Channel Management Budget 137

Sales Budget 138

Breaking Down the Salesforce's Time 138

Call Center Budget 142

Administrative Budget 142

Expense-to-Revenue Ratios 142

Example Routes (Tables 7.2-7.5) 143

Comparing the Company's Go-to-Market Performance To Best Practices 145

F5 Networks 145

F5 in the dot com Boom and Bust 146

F5's Turnaround 147

Changing F5's Go-to-Market Process and Strategy 147

The Eight Dimensions of Go-to-Market Performance 149

Summary 152

8 Connecting RTM with Corporate Strategy 153

Adobe Adapts Its Go-to-Market Strategy with RTM 153

Milestone 153

Network Publishing 154

Ready to Go to Market 155

Gap Analysis 155

New Routes to Market 157

AlterCast Route Calculations 158

Impact on Adobe's Performance 162

Classic Management Pitfalls Revealed by RTM 163

The Average Cost Pitfall 163

The "New Product, Same Old Channel" Problem 163

The Lack of Alignment Trap 164

The Mistake of Ignoring the Life Cycle 165

The Stockholm Syndrome Hazard 165

The Product Distribution Problem 166

Summary 167

9 Implementing RTM Company-Wide 169

Route Consolidation 169

Evaluating the Company's Go-to-Market Model 171

Budgeting Costs by Department 172

Allocating Costs 173

How to Launch a Shared Resource 174

Adopting the RTM Methodology 175

Launching RTM in Ten Steps 175

Summary 179

References and Resources 181

Author Biographies 187

Index 189