Did you know that the global success rate of new product launches is 4%?
A whopping 96% of new product launches fail, often immediately. How can companies avoid product launch failure?
One of the biggest reasons for products failing to achieve market success is that companies get excited about a new concept, start R&D to produce it, and then launch it.
There is a solution to this problem. But it isn’t very sexy. (So it's often ignored).
The most important thing a company can do before launching – or even developing – a new product is to engage buyers in the product development and go-to-market planning process. With their input, customers will identify the features that matter most to them, the benefits they need the product to deliver, and the product launch strategy (messages and channels) that will ensure the product gets traction.
How can companies get customers involved in product development? Customer Advisory Panels have become popular in recent years and can be a phenomenal tool. But there are simple approaches too, like interviewing customers and listening – intently – to their answers. Here are 4 questions to ask customers while you’re developing a new product or service:
- Who is involved in making the decision to buy the product / service (is it a single person, a committee, an informal group?);
- What is the process used to make buying decisions (is it ad-hoc, RFP?);
- What are the criteria used for selecting a vendor (reputation, technical specs, relationships?);
- What is the typical timeline for making the decision (1 day, 1 week, 1 month, 1 year?).
But don’t stop there.
Getting answers to the questions above isn’t hard. But it’s getting true INSIGHT that matters. Getting insight means getting the whole truth from customers – not just pat answers to these questions. You or your marketing consultants need to develop rapport with your interviewees and the ability to get ‘the dirt’. Because beyond the basics, there are many nuanced items that will make or break a new product. For example, sometimes a competitor is so entrenched in a company’s other business lines that they can’t be bumped even if one or two or their products are shoddy. So a new company that thinks it has something great will quickly learn that building a better mousetrap doesn’t always mean business success.
Having a deep understanding of buyer behavior will make your new product or service more saleable. It will also help you plan the right sales and marketing activities to ensure the launch is successful and that you spend the right dollars in the right places, from day one.
Here’s how to shift your budget to put this tip into action:
When you’re planning your R&D budget, add a line item for customer involvement and marketing planning. Take 5 – 8% of what you would spend on materials and engineers, and allocate it to this marketing research and go-to-market planning activity. I predict your success rate will more than triple.