Launching a New Product, or Service - What You Need To Know

You can get insurance for pretty much everything -  even very risky activities such as parachute diving and stock car racing.  But you cannot get insurance in respect of launching a new product, or service.  Why?  Well, because the risks are simply too high.

Now, at this time when innovation is so important, pointing out the risks is not meant to deter individuals or companies from launching new products, but to prepare them for the road ahead. 

This list  of what you need to know before you decide to launch a new product, or service has been inspired by a piece written by start-up guru Brian O Kane.

1. It is going to take a lot longer than you think and more time and money too.

2. The chances of a set-back, or a false start, are great.  There is a risk of your won't get off the ground at all!

3. Your plans are how you want it to be and they are a good guide.  But that is not how it will work out.

4. If you hire somebody for the job of selling, it more than likely won't work out – either way the success will still depend on you.

5. The customers you imagine for your solution, are probably not those who need it most

6. People don't know they need your solution, they probably don't even know you exist.

7. You need selling more than marketing, because months down the line you will be complaining that you are not getting to see enough potential customers.

8. Having the best solution doesn't guarantee success.  In fact, nobody important cares about your features and technology.  What your product does, is more important than how it does it.

9. People won't believe how good your solution is, unless your customers say so.  So don't write brochures, write customer success stories.  Oh and that means getting your first satisfied customer as a reference site is key.

10. You are going to struggle to be objective, unemotional and rational about your new product, or service.  That is one of the biggest threats you face.

11.  Success is a confluence of factors, many of which are outside your control.  That is why people say timing is everything.

12. Market resarch may well lead you astray, as keep you on track.

13.  Ironically, the more you think your solution appeals to everybody, the more difficult it will be to market, and the most costly to develop.  You will be tempted to add in more features and more complexity than is necessary.

Find out what the customer wants and give it to him, or her

The best advice in sales and marketing is the simplest: find out what the customer wants and give it to him, or her.

Sounds simple, but what if the customer does not necessarily know what he, or she wants? How exactly do you get inside the head of the customer to find out what he, or she is thinking? And are customers really willing to be involved in questionnaires and market research? How many people should I talk to, to find out?

We hear those questions a lot, particularly in respect of new products, or markets, so lets have a go at answering them:

What if the customer does not necessarily know what he, or she wants? Excellent question. Often the customer does not know what he, or she wants, until it is presented to them. To address this problem present the customer with something tangible that he, or she can react to, that is a visual, prototype, or mock-up (of the product itself, or of a brochure). Present the customer with what you think he, or she wants in order to find out exactly what is needed. And if you are not sure what he/she might need in advance of asking, pull together as much as you can about competitors, the market, etc.

How exactly do you get inside the head of the customer to find out what he, or she is thinking? Again the answer is similar - show something. Give the customer something to react to - it is easier for people (particularly when you have a limited time and attention) to react to something and say yeap, I see what you are offering, I like that bit and that bit, but what I would need to see also is this.... and have you thought of this... etc.

Show something and then ask if that is what they want, and is there anything that they need that it does not do, what features would be most important, what reporting suite should it integrate with, what is the criteria before getting on to their network, what is the process for evaluating new products, suppliers, etc.

And are customers really willing to involved in questionnaires and market research? Well, people are very busy and do tend to be shy of questionnaires. That is not helped by the fact that many people have bad experiences of surveys - having been asked to participate in a short survey to find that it takes 30 minutes, or ends up as an excuse to sell to us. On the other hand, most people like to help where they can and do like to give their opinions.

Can you rely on what the customer says in forecasting sales potential? Well, the answer is yes and no. All too often vague answers from uninformed potential customers are taken literally and then inputed to sales forecasts - 30% of customers said they were interested in the solution, or would consider buying, ends up being a sales forecast. There is more on this subject here .

How many people should I talk to? Well, there is a trade off to be made here. You could talk to lots of people and ask them questions, but while a larger sample generally means greater scientific accuracy, it often is at the cost of the depth of information gathered (e.g. lots of yes and no answers, but little detail). On the other hand you could talk to a smaller number and getting a real understanding of their needs, attitudes, buying behavours, etc.

What is very important however (and often overlooked) is to talk to the right people - for example talking to 5 CTOs may be much better than talking to 50 software developers, or vice versa, depending on your requirements. Generally, however there are two good rules of thumb - don't just talk to the people you know (it may not be as easy for them to be objective) and dont settle for less than somewhere between 10 and 30.

So, find out what the customer needs and give it to him is still the best advice going. However, some considerable degree of care is required in order to successfully put this advice into practice.

WARNING: You Cannot Rely On Market Research Alone

I talked to a entrepreneur today who, buoyed up by initial feedback from market research, was ready to set up a new business line, create a new web site, sign up customers and start offering discounts.  Halt I cried, you cannot rely on market research!  You're going to need more than positive feedback to build a successful business.

While listening to the market, and specifically your customers, is vital. the ability of traditional market research to accurately predict buying intensions is patentently limited.  I know this from 10 years selling the market research services to industry and projects involving more than 20,000 interviews with international business buyers and consumers.

When I urge caution in how market research is interpreted for making decision, I am not talking about issues of statistical validity, or reliability.  I am talking about the fact that just because a buyer tells you that he is interested in buying and you tick the appropriate box on the questionnaire, does not mean that the buyer will in fact buy when your product, or service, when it is launched.

Now it is not that the interviewee is deliberately deceiving you.  It is just that market research questionnaires and real world buying scenarios are two very different things.   I would much prefer to base my decisions on sales calls than questionnaires. 

There are of course things you can do to get a more accurate picture:

1.  The first is get face to face with the customers - telephone interviews and postal or online questionnaires can only do so much.  Next make the call more of a sales call, presenting the customer with more information, including prices, sees visuals/demos, etc. - the things that are essential to him/her making a considered opinion.   

2.  Even if you are at concept stage, create a visual, or prototype, however simple, that will enable your customer to give a more considered and informed reaction to your product.  People have limited time and attention, so make it easy for them to get to the nub of the issue - whether they want your product, what features they really need, etc.

3. Ask the right people, at the right time and in the right way.  For example, if you want to ask people about domestic appliances, then the best place to do so is in a electrical retail outlet - after all the people there are potential customers and are in 'the buying zone'.

No matter how accurate your picture of the market is, the interpretation is everything.  Most importantly scenario-based sales forecasting is key and in particular the assumptions you make about the percentages that are actually going to do what they said in the questionnaire and the implications of the same for your business.