No matter how successful, a year or two will usually see revenue level off into a plateau for most businesses. When this happens, some business owners are content to earn consistently. However, there is a drive to find new channels for growth for others. This beginner's guide to product launches will show you this can be the catalyst for this growth.
Beginner's Guide to Product Launches
Suppose you are running a product-oriented business of any kind. New product launches can be your business's lifeblood, helping to drive new revenue streams and keeping old customers engaged. However, when it comes to consumer products, in particular, planning a new product launch is a complex and delicate process. While the rewards are potentially great, so are the risks of failure.
How to bridge the gap
You must approach your next product launch with the help of strategic planning. Strategic planning encompasses the basic processes from ideation to determination of a product-market fit, marketing channels, advertising, etc. When done correctly, it will be a multi-step process as follows:
- Initial market research
- Sales enablement
Any mistakes or omission in any one of these steps could mean an outcome that is wide off the mark. There could be catastrophic financial implications.
Research is your friend
Research has shown that over 25% of gross revenue and profits in most industries come from new product launches. It is important to consider that your competitors know this already. You can bet that they are increasing their R&D budgets year-on-year to keep up with the pace of innovation. Some companies rush through this process and end up failing entirely. This is reflected by a staggering above 70% failure rate for new products (groceries).
Executing your product launch successfully
If you are planning a new product launch, by now, you probably see the picture quite clearly. Succeed, and the rewards will be immense, but failure is just as likely as a success if you plan poorly. For businesses looking to use their dollars wisely, here are the steps to take to execute a new product launch seamlessly:
- Start with the Customer in Mind
Great market research is entirely focused on the product's consumer. After all, there is no point in creating a brilliant new product that nobody wants or needs. Effective market research focuses on uncovering the market's needs and fulfilling them precisely.
Research should also focus on other areas such as consumer spending power and general economic and industry-level trends. The last thing you want is to spend millions of dollars on a new product launch that no one can afford. Nor do you want to go through an expensive launch six months behind your competitors.
- Test Extensively
Sometimes your new idea may be so genuinely authentic that no one else has tried it before. Your customers might not even be sure what to make of it in principle. In these cases, the best practice is to test the product extensively. This allows you to see exactly how your customers interact with it and how it meets their needs (or fails to). Once this has been tested on a small scale, you can begin moving forward. Either it will be safe for you to expand your offering, or you will have to go back to the drawing board with minimal losses.
- Stay Balanced
For many companies, the thrill of launching a new product very easily overtakes all other business processes. This leaves the business walking an operational tight rope and clearly would increase all-around failure chances. Why? A new product launch requires each functional unit to operate at its best. The best practice would be to integrate the launch cycle into the regular business cycle.
- Do not Leave Sales till after the launch
It may seem intuitive only to commence sales enablement after the product launch, but the reverse is true in reality. For the most effective results, sales enablement must commence months before a product finally hits the market. This idea is backed by research. Studies have shown that 75% of sales reps tend to achieve their sales quota when proactive sales enablement is done.
- Aggressive Marketing can Make a Difference
Just as sales enablement must begin long before your product hits the market, pre-launch marketing is crucial. In particular, questions to be answered include what channels to use, what positioning strategy to adopt, and so on. Advertising is a crucial piece of the puzzle for new products, so do not be shy with your ad spend. If you have done your market research already, this stage will be executed intuitively.
- Measure and Analyze
The best way to evaluate a new product launch's success or failure is to set key performance indicators. You can also focus on other metrics if you would like. These will allow your new product's performance to be meticulously measured. Attention to analytics details will help uncover key trends, such as the most profitable market segment or geographical area. Once you find out what works and what does not, you can then home in on the likely areas to yield the best results.
- Be Prepared to Take Short Term Losses
Since you have already done your market research, you will know what works best for your target market. Do not be afraid to try creative means of exploiting known behavioral trends! Even if these make you lose money upfront, try these techniques. For example, for a target demographic that prefers budget shopping, you may successfully get them hooked on a more expensive product by offering significant discounts at first.
- Build Scarcity
Scarcity sells products. This is time-proven marketing wisdom that has worked in almost every industry. It is basic human nature to over-value things that are not available. Therefore, to make your new product a success, think of ways to create an artificial scarcity. For example, you may choose to release the product only in a few select locations at first. You may decide to launch the product at relatively high prices. If the product has been built to provide value in terms of customer needs and peculiarities, you can be sure that any perceived scarcity will send them running.
If you are preparing for a new product launch, these tips will help you get started. However, if your businesses is in a creative rut and cannot think of new products to launch, this is understandable. To find out how to create new products that your customers will love, click here.
Talk to your Customers
Talking to your customers is a very intuitive way to find out what works and doesn't work for them. Once you have this information, your task will simply be to create a product that meets these needs.
There are several ways to do this effectively, such as focus group interviews, one-on-one interviews, and surveys.
Check on your Competitors
A good way to figure out your next product might be to check out what your competitors are doing. You do not need to go to the length of corporate espionage to achieve this, though. Much of this information will be available to industry insiders. Perhaps your competitors have caught on to some trend that you have missed. Once you have an idea of what they might be doing, be sure to validate this by going through step one again.
Keep tabs on Relevant Influencers
In every industry, a few individuals seem to have a bit more information than anyone else. They seem to know what the next big trends are before most others do. As a result of their knowledgeable status, these people also tend to have many potential customers. To figure out what the market might be crying out for, you may reach out directly to relevant influencers. You may simply follow them to keep tabs on what they have to say.
Follow New Product Trends
While the previous steps are all ways to keep an eye on evolving trends, you can also use technology. Sites like TrendHunter do the market research on consumer trends and make this data available to you. You could also hire a market research firm to create bespoke consumer trend reports for you. This takes the stress out of your own market research.
Rehash an Old Idea
Sometimes, a new version of an old product works just to attract buyers as an entirely new product would. If you doubt this, consider apple's constant rehashing of the iPhone. If you cannot think of a new product, think of new features to add to old products.
Creating new products is a great way for businesses across all industries to rake in fresh income. However, it is also a great way to keep their existing customers loyal. The process is a complex one and may easily lead to failure if not approached with care, though. The most important principles to remember are the need for solid research, extensive testing, a balanced launch cycle, proactive sales enablement, and aggressive/creative marketing strategy.
Considering launching a brand, rather than a particular product?
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