Over the next three years, to generate organic growth more than half the companies participating in a recent McKinsey study indicated that the creation of new products, services or business models will be a key to their strategy. Yet, new products have a poor success rate. Only about one in five survives longer than a year, and new product launches are six times more expensive than line extension launches. The result: As many as 95% of new products introduced each year fail, resulting in massive losses.
Given the cost to create and launch a new product, combined with the rate of failure, being able to successfully develop and bring new products to market is an important capability. Once you’ve decided to develop a new product, you will need to begin thinking about your go-to-market strategy and how you will launch it.
Want better results? Question your way to a stronger launch.
A product launch will not guarantee the success of a product. A good launch cannot overcome a flawed product. However, if you’ve developed a competitive product that meets a need and is a solution of value and you can create a believable and ownable position in the market, then you’re ready to invest in a product launch strategy and plan.
As you begin to develop your product launch strategy, answers to the below questions will help you better develop your approach:
- Why is this product important to your business, to your customers and to your market
- What role does this product play in your business? For example, does it fill a gap, make you more competitive or meet a specific customer requirement?
- How is this product better AND different from competitive offerings? Is the magnitude only incremental or is it significant?
- What constitutes success for this product and in what time frame? Think beyond revenue to such measures as category ownership or position, brand preference, customer expansion.
- How will you measure the success of your launch? Of course, the primary goal of the launch is to close deals. A well-executed launch should improve velocity; therefore, consider measures such as the rate of product adoption, and your inquiry and quote rates as measures of launch success. Take five attributes such as product complexity, compatibility, relative advantage, observability and trialability when establishing product adoption rate targets and time frames.
Keep in mind that the launch and product are separate efforts and therefore need their own measures. Also, different products need different types of launches.
What kind of launch does your product really need?
There is a myriad of reasons to add a new product to your portfolio. All new products are worthy of being properly launched into the market, but not all products are worthy of the same launch effort. Launches of any kind take resources, people and cash. It is helpful to have a method to determine what kind of launch is appropriate for what kind of product. The kind of launch should be determined by the reason why you are adding the product and its role in your business.
We often recommend that you have a method for organizing your new products in launch classes. Different classes merit different efforts. For example, you might create three classes: X, Y and Z. A Z class might be a product that fills a gap in an existing family of products, offsets some customer risk and brings your competitiveness back to equilibrium. An X class might reflect products that are innovative and completely new to the market, products that are disruptive and give you a competitive advantage. Perhaps they signal a technology change or a new architecture, and/or create a new market. Clearly there is a difference between a Class X and a Class Z product. While they are both important, your plan level of investment will be different.
Once you establish your launch classes, then you can decide how you will launch each class to your various stakeholders, such as your existing customers, existing partners, influencers such as the press, analysts and other industry experts, and of course your internal stakeholders in sales, customer service, production and so on.
Define what channels and touch points you will deploy for each stakeholder for each class. For example, Class Z launches may only warrant a press release for influencers, but a Class X product may be worthy of a press and analyst tour that includes a briefing kit, beta customer testimonials and a series of articles. While every class will require a landing page that employs SEO to support the product, Class Z launches may only have a sales sheet and virtual briefing for the sales team and partners, whereas X products may need training, a selling kit and a partner promotion. Once you establish the components for each stakeholder for each class, you will have a framework for your launch plan.
The Strategic Difference
Based on our experience, product failures are often the result of poor product launch planning and execution. Too often we see a scramble a few weeks or a month before launch to pull together a plan. Product launch requirements should be part of the signoff process for all new products/upgrades being considered, as both must be funded adequately from the start. This requires input from a cross-functional internal team and perhaps outside stakeholders, such as suppliers and partners. With the launch plan coming together earlier in the cycle, all effort can focus on ensuring successful implementation in the time period just before launch.
Writer: Laura Patterson.Laura Patterson takes a practical, no-nonsense approach to proving and improving the value of marketing. Laura began her 25-plus-year career in sales and had the great fortune of working across functions spanning customer relationship management and marketing. Today she is at the helm of VisionEdge Marketing, founded in 1999, and is a pioneer and authority in the marketing performance management (MPM) discipline. The company specializes in helping companies apply data, metrics and proven best-in-class practices to improve marketing effectiveness, deliver business impact and enable better business decision-making.