The 7 Reasons Why 60% of New Products Fail
Why do 60% of new products fail? Now the problem with lessons is that nothing is going to be so revolutionary that your jaw drops and you say, “I had no idea I should have done that.” To paraphrase Peter Drucker, we don’t need so much to be lectured as reminded.
- LACK OF A CLEAR VISION
- POOR PACKAGING AND BRANDING
- LACK OF DISTRIBUTION
- POOR MARKETING AND TARGET MARKET
- LACK OF STRATEGIC INNOVATION
- PRODUCTS THAT DON’T PRODUCE RESULTS
- NOT WORKING AS A TEAM
The first step to creating and growing a powerful business enterprise and product is to develop its vision, the goal and the ultimate purpose that drive the business. You must create a vision for your business and product that will drive and excite people to support you and help you in growing the business.
Two Components to creating an effective and powerful vision for your business/product:
a) It must be emotionally charged and have the power to move people to action, to give people a reason why what they are doing is important, and/or potentially engender a value system.
b) It must be specific and measurable. In addition to providing a powerful reason for being and your vision should also provide detail about how the company is going to operate.
The most powerful visions can even re-invent the basis of an entire industry. For example, Federal Express’ first vision was to consistently deliver all packages to its clients by 10:30am the next morning. This was unthinkable at the time, but because everyone in the company was focused on that specific result, it was achieved in a short period of time. Today, Federal Express is the world’s express transport leader, delivering over three million packages daily.
“Vision is what they call it when others can’t see what you see.” Howard Shultz of Starbucks
Choosing the right look for all your labels, boxes and printing is critical. This all starts from your logo, colors used, fonts, design and more.
When starting a new product or improving upon an existing product identity, it’s important to brand yourself and image in an appropriate way that also differentiates you from all your competitors. Too many people decide to make designs similar to other companies instead of branding their own image online, offline and through its packaging.
Be resourceful and strategic in how your products are distributed. We are in a global market now and small companies today can compete with larger companies if you are resourceful and strategic. It’s not about how much money you have or how many employees you have anymore.
So many companies have product failures because of putting too much time and energy into expensive packaging when it accomplishes nothing due to a lack of effective distribution.
Instead of selling your product only through health food stores such as Whole Foods, you may want to consider selling directly to your clients via phone and online. Dell became a leader with this business model and now more and more companies are finding success this way. Think outside the box in how you could distribute your products to your clients.
Many companies become are too in love with their product and are primarily product driven and forget the most important thing is Marketing and clarity of who you are selling your products to. Do not get caught up in making your main focus to just improve on the product while you forget to market.
And you must have a clear defined client. If your target market is everybody, you are doomed to failure. It is like shooting a gun at a bull’s eye. You will most likely never hit the bull’s eye if you are aiming at the whole target.
It’s very important to be strategic about understanding who your client is, what are their wants, needs, desires, budget, etc and then create products around them in mind. It is so important to do research such as focus groups before you go full force to know your client better then anyone else. Listen to them and ask them what they want, what they buy, what they value, what’s important to them….
Create a category that doesn’t exist that no one is doing or at least doesn’t have leadership in. Enter that category, such as a type of client or type of industry as small as it may be and dominate it. Own it.
Utilize the power of strategic Innovation by maximizing your business and product success.
Strategizing must be a skill as deeply embedded in your organization as total quality, cycle-time reduction, or customer service. Strategic innovation is the ability to reinvent the basis of competition within existing industries and to invent entirely new industries.
Keys to strategic innovation are to be just ahead of the trend, ensure that there are infinite upsides, get new voices around you, ask new questions, get new perspectives and do new experiments.
“Taking risks, breaking the rules, and being a maverick have always been important but today they are more crucial than ever.” Gary Hamel – author of “Killer Strategies that Make Shareholders Rich.”
Create products that are good quality and serve others. Products don’t fail just because of poor product quality but it affects your marketing message, your re-orders, referrals and true raving clients. Clients lose trust and respect for your brand and your products if they aren’t completely satisfied.
Everyone in the company should be involved in the new product introduction — sales, R&D, marketing and accounting. Everyone should be involved in the early stages and have a defined role. The concept of “silos” must be removed from the new product process as quickly as possible. The old model of having R&D find things, hand them to Operations and Engineering to figure out how to make it, and then call in Sales and Marketing to sell it is long gone. The new product team must be composed of all the above people and they must manage the process together with the common vision, purpose and strategic goals. If the product is a success they can all take credit, and if it fails it isn’t a marketing failure or an operations failure, but a new products team failure.
