In today’s fast paced business world, our customers and our industry can change rapidly, new opportunities emerge daily and our once cutting-edge products or services can become redundant in a blink of an eye. For businesses to stay relevant and successful, an emphasis on continual innovation and challenging the company’s status quo should be a key part of the strategy and culture.
It is now necessary to constantly think of ways to reinvent your business in order to stay ahead of the curve. The reinvention doesn’t have to be revolutionary, but it does have to be continual and add value to your customers. From adding a new product feature, to updating our service process to better meet the needs of your customer, we can find ways to improve our business and stay relevant in the market. However, when we spot gaps in the market, new trends emerging, or we come up with that ‘game changing’ idea, undertaking a process of new product or service development might be what you need to propel your business forward.
Having a new product or service to offer however, does not guarantee success. The new product or service must be assessed for viability, planned and developed properly and well marketed at launch. Following the process of product development will ensure that you accurately assess viability therefore limiting wasted resources and investment into a product that might not be successful, build a product or service that has the critical features that appeal to the market, and is launched in a way the builds momentum in the market and gets traction with your customer base.
So if there is a new product or service opportunity in your business, following the steps below before going to market might just be the most important stage your new product’s lifecycle.
Internal Capabilities and Situation Analysis
The first and most vital step is to evaluate your company’s current business situation, to determine its capabilities and capacity, ensuring that there is a need or opportunity to launch a new product or service and that there is the resourcing capacity to see the product through all development stages and through to launch. Resourcing needs to be considered from a financial perspective, along with personnel and time requirements.
Internal and external factors that may affect the performance of the business must also be assessed, looking at the current and future requirements for delivering the product and service, and ensuring that it is within the internal capacity to deliver the product or service. If gaps are identified, it is important to ensure that planned solutions for filling those gaps are achievable for the business, to avoid investing into a product that cannot be delivered in future by the business.
Finally, it is important to ensure the outcomes that are expected to be achieved through launching the new product or service align with the overall business objectives and strategy. For instance, how does launching a high volume, low margin product affect the overall business strategy if the business is focused on lifetime customer value and share of wallet? It is likely that the new product will dilute the overall brand positioning and strategy, detract from existing products and reduce the capacity of the business to achieve its original objectives.
Once you have come up with the idea, and know that it is something that aligns with your business, the next step is to conduct due diligence. Ensuring that there is market demand and industry viability will guide your business decision to continue with the product development and launch. Pertinent facts that you need to get a hold of are:
- Industry Information – This encompasses industry performance, outlook, forecasts and trends in the industry that your product or service belongs to.
- Competitor Information – Look at all competitors and potential substitutes in the market and assess how they market their products, the prices at which they offer their products, their strengths and weaknesses and how they operate their businesses.
- Consumer Information – This includes their spending habits, discretionary income, lifestyle and preferences. What is the current level of demand, and how are their needs currently being met?
- Feasibility Assessment- Looks at the potential pricing structure, costs and returns to determine the break-even point and when the product is likely to produce a return for the business.
In most instances the research phase can be undertaken using secondary research and data, to provide a detailed picture of the product or service’s potential within the market. However, in cases where the product or service is an entirely new offering, or when there is little secondary data available within the industry, it may be worth considering primary research to validate the demand and consumer requirements. Primary research such as surveys or focus groups can provide greater depth of insight into your target market, allowing you to tailor the product or service to their needs and develop and market it a way that appeals to the key drivers of their behaviour.
As you start to develop your new product or service, it is a good idea to seek feedback and input along the way, to ensure the way it is developed, the features and inclusions, meet the needs of the target market.
Conducting a test sampling of your target market to trial your product or service will give great insight into how costumers respond to it, what features or aspects work well and what may need to be changed or added. You may reach out to your current customer database and invite them to a trial the product or attend a ‘demo.’ Alternatively, if you are reaching out to a new customer base, you can use market research or online research panels to trial your product, give feedback on concepts, or review your messaging or branding. This insight is highly valuable to make adjustments to your offering in order to improve it before launching to market. It allows you to find out what the customers like about your product or service, what they don’t like about it and the price that they are willing to pay for it.
Like any aspect of your business, it is imperative to have a strategy in place for your new product or service. You will need to consider both planning for development of the product or service, and for launch and ongoing delivery or management.
A product plan encompasses a blueprint of how the product or service will be developed and managed towards success and how the company’s resources will be manipulated in seeing this process through. Factors to consider in your plan include operational requirements, process changes, technology, resourcing and training, communication and documentation, financial and budgeting requirements and of course, marketing.
Once the steps above have been successfully completed and your product or service meets the requirements to be ready to go to market, it is time for the launch to commence. At this stage, having previously planned your launch, it will be helpful to ensure that the schedule of the launch ties cohesively with all the areas of the business including marketing, sales, distribution and human resources. A launch typically has three phases, and the emphasis of your efforts will change slightly as you progress through each:
- Pre-Launch – During the pre-launch phase, it is necessary to ensure that all launch day activities are on track and scheduled, marketing and communication in particular. At this stage emphasis will be on resourcing and training, ensuring that all internal stakeholders are aware of the new product or service and are educated to the level required to be able to deliver their components. Resourcing and operational requirements will need to be in place, ensuring that the business is ready to support the new product or service on the launch date.
- Launch – The launch phase is when the product or service is unveiled to your target market and the emphasis here now switches to external factors rather than internal factors. Monitoring the marketing impact, gathering customer feedback and assessing the initial perception and product or service delivery. It is likely at this stage that ‘hiccups’ will occur in the product or service delivery, therefore continuous monitoring and agile adjustment of the service process will be critical for long term success.
- Post Launch– After the launch it is important to measure how the product or service was received and how it is being received. It is also important to monitor and measure the media exposure that has been attained from the launch and the impact that it has had in terms of the objectives and targets set. Changes may need to be made to the marketing in order to respond to what is effective and what isn’t working.
The pre-planning and foresight for the requirements at this stage are critical because failure to organise a successful launch may result in your efforts leading up to this point going to waste. We’ve all heard the horror stories of a great product launching but the server not being able to handle the load of users coming to the site, or the great new service that was let down by poor customer service or sales training. While these might be extreme cases, small operational elements that you have failed to plan for can de-rail your launch, and possibly have a lasting negative impact on your product or service.
Overall, the results in terms of business impact that you want to see from the product or service need to be continually evaluated, to ensure that you are seeing return on your product investment. Setting benchmarks and objectives, and using a dashboard or reporting measure to assess performance will ensure that you stay focused on the product or service’s business impact and strive to continually improve the product or service.
If your product or service continually fails to hit your benchmarks or objectives, then you need to evaluate further investing in understanding the reasons it is not performing, and then adjust the product or service to meet requirements, or alternatively removing the product from your product mix. The decision to remove a failed new product or service from the product mix can be a difficult one to make, but one that needs to consider the best outcome for the business.
It is important to remember that before offering a new product or service, the decision to do so must be based on a solid foundation. Following the product development steps above will allow you to start your new venture on the right foot towards success.