Okay raise your hands: How many of you have been involved with a really big new product flop? What seemed to be a good idea but no one wanted to buy.
As a result, perhaps you decided to manage risk by focusing on “sure” bets. But nothing new and bold gets launched. Just an endless flow of “me-too” products and you are losing relevancy in your market.
Worse, perhaps you really did have a game changing idea but it was decided that it wasn’t a good fit for the company. “It’s a distraction and not worth the resources.” Only to discover several months later a competitor had a similar idea but acted on it – and now you are struggling to catch up.
There are five basic reasons product fail in the market. These failures are avoidable if we can understand the underlying root causes. Here they are:
1) The product simply was not needed: We either failed to launch a significant new improvement to what customers already buy (undifferentiated me-too products) or we completely missed the boat and had no idea who and why customers would want the product (a solution looking for a problem).
Remedy 2: Be different and create products that are unique and address non-customers and/or underserved customers. Two excellent frameworks you can use are Clay Christensen’s Disruptive Innovation (jobs-to-be-done come from this body of knowledge) and Blue Ocean Strategy (strategy canvas).
2) The market did not understand or hear the value proposition: We either failed to define a compelling customer value proposition (the solution looking for a problem) or lacked the marketing skills and resources to communicate the value proposition.
Remedy 1: Clearly define and refine the customer value proposition. Use “jobs-to-be-done” marketing lens to identify the preliminary customer value proposition and test it early, often and cheaply. It will evolve as your understanding of the jobs your target customers are trying to get done and their desired outcomes.
Remedy 2: As you formulate the customer value proposition, also define how the target customers typically purchase products (the consumption chain) and formulate a “go-to-market strategy” that matches their buying habits. A good tool to use to architect and communicate your sales and marketing strategy is the “business model canvas” and “multi-channel strategy maps.”
3) The product did not work and/or failed to deliver the “desired outcomes” that were promised: The product either sort of works or flat out doesn’t work, either way the customers are disappointed. Depending on the dynamics and circumstances of your market, you may never get another chance with the customer now that you have disappointed them.
Remedy 1: Don’t over promise and set customer expectation levels you can either meet or exceed. And don’t forget it’s not just the product that counts, it’s the whole customer experience customers will judge you on, from the initial marketing contact through delivery and support. Think like a designer (design thinking) and create a total experience your customers will love and value.
Remedy 2: Good engineering is the pillar to building great products. A sure formula for failure is an out of control development, manufacturing and quality systems. There are fantastic tools and development techniques from “lean” to “design-for-six-sigma” (DFSS) that will get your development processes under control.
4) Business Model didn’t support/justify the effort: The problem being solved simple wasn’t big enough to justify the development effort. Or perhaps too low of a price point and/or too high of a product cost resulting in narrow margins and an unsustainable business model.
Remedy: Think big but start small. Prove the business model first before scaling by focusing on a niche you can achieve profitably quickly. Tools you can use to frame your strategy include Design Thinking and Value Based Pricing.
5) Too many “me-too” projects and not enough game changing big ideas. There are too few of the right kind of project -the bolder innovations – and too much effort on line extensions. The truly deserving projects don’t receive the resources they should and either limp along or die on the vine.
Remedy: Implement a new product portfolio management system that allocates a defined percentage of resources to new and bold ideas. A product portfolio management system is similar to an investment portfolio where we manage risk and reward. A good balance between lower risk product extensions generates cash flow to invest in game changing new product innovations.
Remedy 2: Implement a robust and flexible “idea-to-launch” framework that is aligned to the overall portfolio management system (driven by vision, mission and business goals). The idea-to-launch framework needs to incorporate the voice of customer providing real market feedback and insights throughout the development cycle so we don’t end up with product duds.
In upcoming articles, I will dive deeper into remedies to prevent product failures that will help you transform and accelerate bold ideas into successful new venture while eliminating the waste and frustration of launching product duds.