If you’ve considered launching a new innovation to grow your top line, you’re not alone.
According to Forbes, 250,000 new products were introduced to the world in 2010 alone. We’re overwhelmed by so many new product entries, which range from sophisticated new technologies like the Nest thermostat and infomercial sensations like Pajama Jeans. To complicate things, brands are introducing new line extensions like Kraft Sizzling Salads, Disney Appmates, and a wealth of "new and improved" products from venerable brands like Gillette and Kleenex.
But the fact remains that the success rates of new product introductions and innovations have improved little over the last 20 years. Booz & Company reports 66% of new products fail within two years, and Doblin Group says a startling 96% of all innovations fail to return their cost of capital. This is due to a number of factors, including economic conditions, an explosion of consumer touchpoints, shifts in decision-making behavior, and the deluge of information marketers have to sift through to ensure they are up to speed with the latest trends.
Here are 8 steps any company can follow to increase their odds of growth and transformation through a new product launch:
- Address head-on the number one reason for failure. You can’t fake it if an innovation has no clear or compelling relevance to people’s lives. Companies often refuse to acknowledge a new product or service idea serves no strongly identified customer need, and they try to retrofit their marketing to compensate. Start by identifying a relevant, resonant role you could play in people’s lives. Then develop offerings and experiences that deliver it in a peremptory way.
- Focus on the most critical rule of thumb for growth today--customer acquisition. Get as many quality customers--even light, occasional users--as quickly as possible. More customers mean more sales, share, and with that, conversion to loyal, heavy users. In addition, new customers have a key attribute that every marketer should leverage--word of mouth. Forrester Research concludes the most valuable customer today is the one that may buy little but whose blog postings, online product reviews, and favorable word of mouth gets 10, 50 or 1,000 others to buy. The longer people are with a brand, the less they talk about it, but new customers are more likely to recommend a brand to their family and friends.
- Face what you must really accomplish through Facebook. Nielsen reveals that the number one reason a Facebook user “likes” a brand is to receive a discount or special offer. Their research also shows 84% of users who “like” a brand on Facebook never return to a brand’s page after exercising the incentive that got them there. This means the typical marketer’s Facebook strategy is doing little to grow their customer base, and worse, it could be inadvertently and dramatically hurting their margins. Marketers must ask themselves: What--beyond a discount--will both incent new customers to like my brand and habituate their interaction with it?
- Think faster. With the impatience of bosses and investors today, you can’t just obsess about how to quickly add quality customers. You also have to obsess about how to add them faster than anyone else in your category. Growing a customer base quickly is unlikely to come from building an e-commerce site and expecting people to find it only through search and blogs and Facebook. Getting lots of new customers quickly requires some sort of mass reach. From the Advertising Research Foundation (ARF) to the World Advertising Research Center (WARC), the findings are quite consistent: Mass reach from traditional media is--at least for now-- still the most effective way to grow a customer base. It’s also the quickest way to jump-start search, online relationships, and e-commerce. Even the “most viewed” YouTube videos get their biggest jolt with a mention in mass media. The very thing that can’t be done in social media is what traditional media does best: jump-start conversations. Social media then fuels these conversations.
- Don’t be fooled by the hype. Contrary to the buzz about the power of social media and apps, adding TV to the media mix still proves to be the most effective way to jump-start growth. One particularly interesting case is that of KAYAK.com, which launched only online and grew steadily over two years without mass advertising. Since adding TV to its marketing mix last year, sales experienced a dramatic lift. TV exposure can--even weeks later--drive a potential new customer to search for you.
- For maximum ROI, perfect your mix. It’s a waste of time to debate whether TV or Facebook delivers it best. It’s more important to identify the ROI of the media mix that advances people through the purchase funnel--what medium best engages to drive a consumer to deeper engagement in another medium, and then habituates engagement or converts the interaction to a sale. Identify the mix that leads to the best conversion rate and then work continuously to improve it.
- Map your measurement. Many marketers say they know the media or touchpoint path their consumer takes on their way to purchase--until asked to map it visually. Plotting the path takes a chart with a horizontal axis of touchpoints, and a vertical axis with the steps and stages of the buying process. Identifying the elements of each axis and then tracking the order and incidence of each forces marketers to confront what they know and don’t know, like: What is the entry point into people’s lives for a new category or product? Where and when can one maximize reach? Where are people falling off the path to purchase? What message is best at each touchpoint to move a person to the next stage of their decision-making? The ultimate benefit of mapping is identifying the mix of touchpoints and messages that drive the best conversion rate. It’s almost never one medium or message but a mix that, with the right analytics, can always be improved and optimized.
- Prepare yourself: Your launch never ends. Marketers must face that their launch will be forever in beta, a state of continuous improvement that prevents the brand from losing momentum, or worse, stalling out. Studies confirm that marketers who assume their launch is over, who pull back, who stop innovating, or who let share of voice fall below their market share, do not fare well.
While embracing any one of these ideas can make a difference in the launch of a new initiative, really increasing one’s odds of success will come from bringing them together in a comprehensive strategic marketing plan. As so many successful company leaders have confessed: The best way to predict the future is to create it for yourself.
10 Common Product Launch Mistakes (And How to Avoid Them)
Every year there are thousands of new products that hit the market. The vast majority of them are failures. Making even one mistake can ruin your product launch. With so many intangibles in the process, it makes sense why there are so many things that can go wrong. Let’s look at some of them.
- Assuming There’s A Need For Your Product - Just because you think that your product will be a success doesn’t mean that anyone else will. Poor research in the product development phase can lead to this problem. Will people choose your product over the competition? What makes your product different from the competition? These are questions with answers that should be determined long before a product can be brought to market.
- Being Too Much Like the Competition - This is the single most repeated mistake that businesses make. There are always going to be some similarities between products, like Pepsi and Coke or Chevy and Ford. You still want to carve out as much of an identity as possible. If you are aware of the position that your product occupies in the market place, you should be able to avoid this.
- The Product Doesn’t Live Up To Expectations - History is littered with products that were pushed into the market before they were ready. Companies think that they can overlook quality issues and just get it out there. Cell phone manufacturers are notorious for this. The thinking is that any software glitches can be ironed out after the product is in the hands of the consumer. All it does is cause ill will on the part of your customers.
- Not Being Fast Enough - You must meet your product deadline. If you’ve done your job right, customers will be heavily anticipating your launch. If you don’t come through on your promise, people will doubt that you can come through on anything else. It’s better to work as hard as you can and finish before that date, than miss it. Follow these points to avoid wasting your time:
- Give your team a goal that is sooner than the one that you’re giving to the public. This helps to keep everybody motivated.
- Constantly re-evaluate those goals. Since your internal goal will be sooner than your external one, you should have plenty of time to make it. If you’re always on top of your timeline, you won’t be caught off guard if there are delays.
- Establish touch points. As you work toward your product goals, divide them into 5 or 6 smaller achievements so that you can keep an eye on your progress. For example: 20 days before launch, your plans for your launch event will be complete; 30 days before launch, your marketing materials will be complete, etc.
- Poorly Defined Problem - Another avenue that can derail your launch is if your team is unsure about what problem your new product is supposed to address in the first place. If you and your team understand the problems of your customers differently, it may be difficult to get everyone together to solve that problem. If your team is confused about the purpose of the product, it will be impossible to solve the issue. This can also lead to conflict between members of your team. Either way, communication is the key to success. If you don’t think everyone is on the same page, ask them how they see the product solving the problem. Asking questions is a fundamental way to solve problems.
- Ignoring The User - If you’re launching a new product, it only makes sense that you’d want to test the public for feedback. But this isn’t always the case. A lot of times, people who develop products don’t really care about engaging with customers. If you aren’t comfortable with the idea of doing prototype testing of your products with people who have never seen it before, then you need to have someone else do it. Ignoring users gives you a product that no one wants.
- They’re Afraid To Fail - People will delay product launches over and over again out of fear. They think their item or service won’t be as good as what they competition is offering. They think that people will look down on them, and this makes them hold back. There is nothing more difficult than launching a product that is intended to surpass a favorite of customers. But really, what’s the worst that can happen? Yes, you can fail, yes, it might be expensive, but thousands of successful people have failed before you. You miss 100% of the shots that you don’t take. Failure can be a great teacher. Steve Jobs was fired from Apple, the company he started, only to come back and be much more successful than before. That failure was arguably the best thing that ever happened to him.
- Too Many Distractions - One of the keys to a successful product launch is focusing on the task at hand. The time frame around the development and launch of your new product should be about nothing else but preparing for that launch. Eliminate as many distractions as possible; it’s key that you keep them to a minimum. Remind your team that the launch needs to be their focus as well. Put reminders of the product launch date everywhere so that no one forgets.
- Developing a Product For Technology Most People Don’t Have - Sometimes a company will attempt to capitalize on the newest-cutting edge technology. There’s nothing wrong with that in theory, but if a platform is too advanced or too expensive, much of the general public won’t use it. Software designed for an operating system that only genius super-hackers use won’t get very much exposure. Conversely, don’t base your product on outdated, obsolete technology. Designing Commodore 64 game today probably wouldn’t be very lucrative.
- Spending Too Much On The Launch Itself - The launch is the kickoff for your new product; don’t blow your whole budget on it. Your new product needs ongoing support to ensure that it is a success. You’ll want to continue to build on its awareness with a combination of advertising, social media, public relations, and other marketing techniques to help it succeed.
It is extremely difficult to launch a new product successfully. Some estimates put the failure rate of new products as high as 95%. With hard work and attention to these 10 areas, hopefully you can avoid the mistakes that others have faced
The Three New Product Launch Phases
- Phase 1 - Pre-Launch phase is where you build a list of prospective buyers in your target market. In this phase you create and tweak your sales process until it is very solid and you create a buzz around the product which will promote awareness.
- Phase 2 – “Launch Day”, is the day that all your affiliates and JV partners will help to promote your product. To help increase sales, you put some kind of scarcity or deadline on your offer – so that you can get as many sales as possible.
- Phase 3 – Post-Launch phase usually has two parts to it, first part is where you create an additional bonus or bonuses to prevent buyers’ remorse and reduce refunds. The second part is to figure out how you will continue making more sales so that your site will not just have the launch spike and then fade into the deep blue sea.
These 3 phases of product launches may seem simple, but the truth is only a few marketers are able to pull them off leaving those that have not followed this new product launch checklist well and truly down on sales and profits.
By following these 3 phases successful product launches should become the norm and not leave you scratching your head and wondering what else you need to do to increase sales.
Alpha and Beta Testing or Readiness Validation
Always thoroughly test your new product in order to discover any design, mechanical or electronic design flaws, errors or omissions. Failure to test your new product or service can lead to embarassement, a costly product recall, refunding customers or lawsuits due to dangerous products. New product testing should include both an Alpha Test and a Beta Test. This is commonly referred to as A/B Testing. If you are a software developer, below are the important steps in an A/B Testing.
- Alpha Testing - The first testing should occur in-house with different operating systems and different hardware configurations. An alpha version may not yet contain all of the planned features, and may lack documentation. Use virtual systems or test drives to fully test software with various operating systems and patches. Thorough alpha testing will make beta testing run smoother.
- Use people within your organization that are unfamiliar with your software. If you don't have anyone available in your organization consider asking family and friends.
- Before moving an alpha product, to a beta product consider having an "ignorant" user do a complete install. Silently watching the tester, will give you a birdseye view into user habits and potential problems during the install process.
- Beta Testing - Beta testing is considered the second phase of software testing. Beta tests are typically external tests to identify any performances issues or bugs prior to an official release. Beta tests can be open or closed. A closed beta test is used to control the number of users participating. An open test is open to anyone who has an interest in beta testing.
Why Beta Testers are Important
Beta testers are important because it is almost impossible for developers to test their software in all of the various conditions that might occur. Software should never be released without thorough beta testing. It is impossible to predict or test software on all kinds of hardware with other applications.
Some developers segment the closed beta into different release stages so they can maximize feedback. Historically the majority of feedback is received from beta testers within the first week of the beta release. It is highly recommended that you use a minimum of 100 beta testers for your new product. This will allow you to
100 Beta Testers
- Week 1 - Alert 1st Group of Testers (34 testers) of beta availability. Bugs found and fixed.
- Week 3 - Alert 1 & 2nd Group of Testers (33 testers) of beta Bugs found and fixed
- Week 5 - Alert 1, 2 & 3 Group of Testers (33 testers)
Use all communication channels to solicit testers. Existing users are the best testers because they are familiar with software and use specific software features.
- Offer Incentives - Lets face it its not easy to convince users to try buggy software
- free registered version for feedback
- discount on registered version for registered beta testers
- payment for finding bugs
- make beta testing a benefit
- Layout Beta Test Expectations - Beta testers should have a good understanding of their role as a beta tester. Educating beta testers will go a long way to improving the quality of feedback that you receive. Provide details on the information they should provide any bug reports.
- Know What to Ask - If a user reports a problem, ask the right questions, so that you can attempt to reproduce the problem.
- Dialogue is Important - You should be sure that you have an open channel of communication with beta testers. Respond to their queries in a timely fashion (24 hours) and always thank them!
- Forum - Create a forum for beta testers to post questions and concerns. Post file updates to the beta forum. Create a specific section of the website that contains beta information.
- Use Exit Surveys in Beta - Use exit surveys in the beta version. This will not only give you statistical information about uninstalls, but will also provide details about why users uninstalled.
- Weak Documentation - Be sure to mention any holes in the documentation, and where the testers can get any additional information that they might require.
- Provide Upgrade Details - Be sure to provide details for users that are using an existing version of the software and looking to test the beta version. Double check prior to releasing the beta version that the user's data will remain intact through the upgrade. Also, check to make sure they have an adequate key or code for the beta version so that it does not expire.
- Make Beta Versions Backwards Compatible - Can users go back to their old version if they do not like the new version? In other words will their registration key work in both the new and old version? Is there a drop dead date, which will prevent testers from using the software for an extended period? Be upfront about these issues so beta testers know what they are getting into.
- Don't Rush It - It takes time to conduct a thorough beta test, don't rush it.
Many entrepreneurs fall into the trap that their first new product prototype will meet or exceed all expectations coming out of the gate. Taking a product from raw concept stage to finished and fully-functional prototype may not always end well for numerous reasons. I have known of numerous cases where the finished prototype failed to work or look like the original concept drawings. It was either poorly designed to begin with, it was too big or too small, failed to work properly and there wa no "Aha" moment when you first saw it.
You cannot compete effectively in a market by producing new products with just incremental changes. Your new product must leap the competition with new technology innovations that do not currently exist. It must be able to solve problems or fill needs that are not presently met by alternative products. Steve Jobs said it quite appropriately when he said that Apple makes products that "people lust for" and you must be prepared to "put a dent in the universe."
Finally, if you have created a truly unique and leading edge new product that is worth protecting, try to obtain trademarks and patent protection if possible. Investors will look at you and your new product more positively if you can show that you have filed the necessary paperwork to protect their investment.