Will you cast your new innovation adrift, or send it deftly into prosperous markets?
By Christopher W. Miller, Ph.D. & Gary C. Graziano, AIA
Whew! You’ve finally cleared the technical hurdles, run the manufacturing gauntlet, and endured trial by finance as we explained in our previous articles. The new product works, the manufacturing process is vetted, and the proforma says “GO.” Now that your job is done, the customers will line up to buy it and the company will start making piles of money, right? Yes, not. You still have to launch your product. This requires a substantial investment in marketing and sales, as well as time for the early adopters to buy and for the masses of later adopters and late adopters to provide the profitable sales volume needed to pay back the company’s investment of its scarce resources. On average, the entire process, from idea to profitability, takes 6.7 years.
Knowing your product, your market, and your customers’ behavior
After three-to-five years of development, you probably know your product better than anybody else ever will, but do you know your market? Have you considered:
- What’s happened to it since you began your new product development odyssey?
- Do the initial assumptions about market size still hold true?
- Are the customers the same, are they concerned about the same things, and do they still behave the way they did?
- Do the same channels still apply?
- What about price?
- What about competition?
- What’s the risk to the customer, have you done everything that you can to remove it, do they have the time or money to try your product, and can they afford to have the product not work for them?
The list of questions goes on and on. It’s not likely that you can answer them all, but you’ve got to answer the important ones.
Hopefully, your marketing team has been a driver in the development process — shoehorning the new offering within the constraints of evolving market tastes and price points. If not, it’s time for a reality check to position your product in a way that will be attractive to today’s prospects, needs, and channels. Sadly, most new product success is never about the technology — it’s about the effectiveness of your messaging and the sirens’ call of the beneficial outcomes your product delivers.
When positioning a product for launch, it’s likely that customers won’t initially care about the technological and manufacturing details that you’ve worried for the last several years. What they will care about, and will want answered, is, “what will this product do for me?” And, “what compelling need of mine will it satisfy?” For business customers, your product might save time, money, or hassle — or even help increase revenues. For consumers, you might also save them time or money, or you may offer something else which is of value to them such as a healthier life or an improved appearance.
Even the most left-brained, rational people make emotionally based purchasing decisions. To be successful, you must remove FEAR, UNCERTAINTY, and DOUBT (FUD), also known as risk. FUD needs to be replaced with a burning desire to try, driven by a sense of privilege, scarcity, or lost opportunity by not being first. Most people like safe decisions, and known quantities, even though there are lesser-known but arguably better or less expensive products available; as the saying goes, “nobody ever got fired for buying IBM.”
To many customers, how the product actually creates value (e.g., how the watch works) is almost immaterial, at first, as long as they trust you, can understand your offer without working too hard, don’t perceive undue risk, and feel smart about making a decision to consider it. Because of this, a simple, easy-to understand message is usually better for your prospects, your sales team, your distribution channels, and your business. A good rule of thumb is, “if you can’t get your message across quickly over the phone and generate the interest and excitement needed to get an appointment in person, start over.” As an example, Al Carlson, a product developer at the Thomas J. Lipton Company, began to ride the wave of the emerging class of time starved working women in 1960 with the simple compelling product idea of the quick-and-easy Lipton Cup-ASoup, ™ a simple product with a name that said what it was.
Determining when it’s right to launch — and how many products to launch
After your final market assessment, you can determine when it’s right to launch and, if you have more than one product ready, how much to launch. Maybe your launch should coincide with the launch of other products from your company, or a major trade show, or maybe it needs to be timed for summer vacation, the back-to-school market, or the holiday buying season. Or, maybe you have to work with corporate budget cycles or extended specification processes and have to start selling a year, or more, in advance of when you expect to book the first sale.
Timing is everything. Launch too soon, and your campaign can run out of funds before your market is ready to listen to you — or copycats may rip you off. Launch too late, and prospects will have spent their money with somebody else. Launch too much and prospects will be confused, and inclined to wait until they can sort it all out.
For Black & Decker, getting into the store for Father’s Day is important, but catching Christmas is critical. If they launch too far ahead, competitors will have enough time to reverse engineer their products so that their versions are in stores at Christmas too. Over time, Black & Decker has learned to deal with this and time their launches accordingly. Today they know that if it they launch a new product 30 days before Father’s Day, they’re safe at Christmas. But, if they launch just a few days earlier, the stores are awash in pirated products by Christmas.
So, before you make extensive launch preparations, be certain that you know where you want to go — and when you need to get there. Study your maps, chart your course, learn how the winds blow, calculate your speed and drift, and take the seasons into account so that you don’t accidentally set sail into foul weather or unfriendly waters teeming with pirates.