Friday, May 26, 2023

8 Priorities When Offering A New Product Or Service

business-startup-targetEvery one of you business owners I know periodically introduces new products and services to sustain growth, fight off competitors, or take advantage of new technologies. Often, despite your passion and expectation, customers don’t immediately see the value and need that you see, and you have no idea why the initiative is stuck, and what could be the real customer issue or fix.

In my experience in business, and as a consultant, I have found a common set of challenges that every new initiative has to overcome for widespread adoption and the business growth you need. Even though many of these can be mitigated by testing and early customer feedback, you will find that it pays big dividends to do your homework before building and rolling out every new initiative:

  1. In today’s customer data overload, marketing is essential. Customers won’t buy what they can’t find or don’t understand. No matter how great your innovation, don’t count on word-of-mouth to save you. The cost of any new product these days must include education and rollout marketing, perhaps equal or greater than the development costs.

    Even more important than solution marketing is building your brand. Make sure new solutions offered actually build your brand, rather than dilute it. New offerings which build your brand will increase acceptance and sales of all solutions, not just the new one.

  2. Solution may require new category development time. Major leading-edge (also called bleeding-edge) products or technologies, such as artificial intelligence (AI) or the Internet of Things (IoT), involve new concepts, time for acceptance, and focus on understanding value. Don’t count on these as short-term solutions to a growth problem.

    These disruptive technologies also have the potential for exposing your business to new competitors, including a wealth of startups that can jeopardize your core business, and redefine the marketplace. If you go this route, make sure your solution is strategic.

  3. Customers need supporting approvals to fully benefit. Often products that introduce disruptive new technologies, such as electric vehicles or healthcare solutions, are dependent on supportive infrastructures, operational regulations, or insurance approvals before benefits can be realized. Your rollout plan needs to factor in these requirements.

    The challenge here is that supporting infrastructure decisions are usually outside your control, and may be political or emotionally driven. To win in this environment, you may need to expand your leadership in industry conferences and community activities.

  4. Target audience may be limited or new due to price. Premium products may have high feature value, but may push you to a new level of customer, and prevent mass market appeal. This may require you selling exclusivity, doing channel development, or alliances with new partners. Another approach is to expand your scope geographically.

  5. Even in the face of real value, customer change is hard. Most new solutions I see are easier to use, more productive, more fun, or cheaper than existing alternatives. You will find that customers discount advertising, and look for user testimonials, online influencer reviews, and return-on-investment examples from industry experts. Incent these early.

  6. Customers fear liability potential or see risks you don’t. These fears need to be offset by early success stories, educational case studies, or advice on ways to reduce risk. Also fears can be mitigated by warranties provided, complementary service options, or money back guarantees. Don’t forget to address the risks and cost of doing nothing.

  7. New solution highlights additional functional needs. Your new solution may seem straightforward and complete to you, but customers find complexity and new feature requirements that are difficult to solve. The result can be a host of new competitive and price challenges which can stall growth or require excessive resources and time.

  8. Customer may decide to wait for the next new thing. Your release of one cool new product may set unreasonable customer expectations for regular follow-ons. Instead of really expanding your market activity, you may find things slowing down as customers wait for the next wave of enhancements. Marketing costs will continue to increase.

Even though many of these challenges may seem obvious to you, I still see them often overlooked by aggressive business leaders, resulting in a large percentage of expensive new initiatives that fall well short of growth and revenue expectations. With the rapidly changing and competitive worldwide marketplace we live in today, do your homework early before you jump.

Marty Zwilling

*** First published on on 05/11/2023 ***



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