Corporate history is littered with failed product launches, from Betamax to New Coke to Google Plus – we even wrote about one failed product launch, Google Pixel Buds, back in 2018.
In fact, it’s estimated that 95 percent of all new products fail.
And while you can find endless lists online that purport to tell you how to do better, when it comes down to it, success is not simply about following a 17-point checklist.
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Instead, like everything else in your business, it’s about understanding the big picture.
To launch a successful product, you need to know your market, and you need to know your customers.
At Mod Op Strategic Consulting, we’ve seen enough to understand what makes a product succeed, and – perhaps even more importantly – what red flags warn of impending failure.
The right product launch playbook covers three big domains. Understand these – and how to avoid the all-too-common traps – and you’ll be well on your way to product launch success.
#1: Know your place in the market
The first thing we do for our clients is create a market map that encompasses their entire industry.
- Who is the ultimate buyer for your product?
- What are they currently using?
- Where does your new product fit – now, and in the future?
Recently, we worked with a company in the legal industry, developing a new product designed to address a need faced by corporate counsel. We looked at where legal departments spend money and deploy resources, including:
- Other law firms
- Legal publishers,
- Research firms,
- Offshore document processors
- In-house services
We then asked: Where does this new product fit? Is it filling a gap, and answering a real need? Will customers want it, or do they already have sufficient options to solve this problem?
RED FLAG: When organizations think they know the market without actually doing the market research. Yes, you know your customers. You may even know how they’re using your current products. But if you think you know everything, and don’t take the time to back up your instincts with the research to build a robust market map, you risk making an extremely expensive mistake.
#2: Test your hypotheses
Some of the most successful products we see today are merely better versions of a product that already exists. For example, Facebook was a better social networking tool than the ones that came before.
Conversely, others invent entirely new categories, such as Apple rethinking the capabilities of a mobile phone to deliver a fully-fledged computer in your pocket.
There’s no right or wrong answer. But you need to understand which mission you’re on – and make sure the market understands it too.
If you’re competing, can you articulate how your product is different from what’s already out there – and are you sure that customers will pay for that difference?
If you’re innovating, can you convince your customers they need this new tool, and that it will address real needs?
We recently worked with a financial services company as they launched a new product that fulfilled both of these ideologies:
- Replacing an existing print publication with a digital subscription product that improved on what was already available
- Adding new functionality that answered needs customers didn’t have other means to address
Our work helped them articulate how to position the product, and our customer research ensured that the marketplace was ready to pay money for this new offering.
And the product? It became a huge success, leading to a 300-percent revenue growth. Why? Because we didn’t just launch and hope for the best. We tested the product and proved the value proposition.
RED FLAG: When organizations don’t want to invest in creating a prototype and conducting robust market testing of the product. Before entering the market, you need to test the hypothesis that the market will actually pay money for your product.
In fact, as much as 20 percent of your launch investment should be spent on this research. Because when people try to skip this phase, they often find that the market response is far from what they expect – and then it’s so much more than 20 percent of their investment that ends up lost.
#3: Understand the importance of pricing and your go-to-market strategy
The go-to-market strategy is an important piece of any product launch. You can’t just build something great and assume your customers will find it.
You need to:
- Decide if you’re going direct to buyers or if there might be channel opportunities or useful partnerships to explore.
- Think about whether customers will need to be educated on the value of the product or how to use it.
- Understand how to optimize pricing.
There are product pricing specialists who have spent their careers analyzing pricing dynamics across industries and who can help you find the sweet spot between pricing yourself out of the market and leaving potential revenue on the table.
Along the same lines, we at Mod Op Strategic Consulting spend a lot of time walking clients through go-to-market possibilities, making sure they understand the range of options out there, especially in the constantly-evolving world of digital.
You are the expert in your product, but you may not be the expert in how to spread the word and maximize opportunity. That’s where you should look for help.
RED FLAG: When organizations think they can do everything by themselves. Outside experts add real value – and their insights can often make or break a product launch, even in cases where the product itself is a home run.
Understanding these three domains can greatly increase the chances of product launch success – and engaging a third-party company like Mod Op Strategic Consulting brings an element of expertise and accountability that can double or triple those chances even further.
Adriaan Bouten, CEO & Founder
Adriaan is an expert in the future of business in the digital age. Having led transformations of such companies as McGraw-Hill and USAToday, Adriaan helps mid-sized organizations identify and execute digital growth opportunities through cohesive strategy, effective technology, and digital transformation.