October 22, 2017

Archives for August 2012

Mistake #1 – Your Company Thinks They Are Right

I’ve had the opportunity of working with many companies over the last twenty years and I can’t remember how many times we would sit around a conference room table and talk about what “we” thought the market needed. This is just one scenario where a company becomes internally focused when creating new products or enhancing existing products.  Some other scenarios I have seen include:

  • A group gathers in the hallway or around the coffee pot and suddenly one person says, “wouldn’t it be cool if we could make the product do feature X”, and the next thing you know, someone has added feature X to the product.
  • The CEO comes back from a customer visit and says, “When I was meeting with customer A, they said they really needed feature Y. Let’s get that in the next release.”
  • The company or an individual develops some new technology and now feels compelled to create a product around it.

These scenarios are well summarized in a quote from Albert D. Ehrenfried.

Too many products are developed to satisfy the desires, urges, and hunches of people within the company, rather than to meet the specific needs of the market external to the company. Products grow out of the desire to tinker, or because an engineer sees a purely technical challenge.

The end result in all of these cases is that you end up with a product that has no clear market opportunity. We often describe that as a product looking for a problem to solve.

What I have learned from my experience and best practices is that we need to turn the process around. First, we must identify a problem that needs to be solved. This applies to both new products and in enhancing current products. Once you understand the problem, now you can create a solution or new feature that solves that problem. This becomes a much more powerful approach.

The best way I have learned to understand market problems is to speak with current and potential customers. I have always been impressed with the insight I learn when I speak with those in my target market. You can and should get this insight at multi-levels within the organization because this provides you different levels of information that will guide your product strategy. These include:

  • Market Trends – You want to understand the trends occurring in the market place and the challenges these trends are creating for the market segment that your serve. You can discover this through secondary research such as press articles and analyst reports and by speaking with the business executives in your target market.
  • Business Needs (Executive Needs) – Based upon the market trends as well as competitive challenges and internal business issues, you want to understand the businesses objectives your market segment is pursuing and what needs these are creating. You can discover these by speaking with the top executives and business unit leaders in your target market.
  • User Needs – Now that you understand the business objectives, you want to understand what capabilities the business managers and the technology users require in order to achieve these business objectives. You can determine these by speaking with managers and with those that execute the work on a daily basis.
  • Technical Needs – If you are delivering technology solutions, you need to understand the technical requirements and constraints that you must meet, such as technology platforms and points of integration. Often, these are pretty clear, but you should speak with business managers and IT managers to make sure you have a full understanding of these.

Once you have done this work, you have a much clearer understanding of the problems that need solutions and can begin defining your product strategy and the specific solutions that you company will deliver.

 

The Top 10 Mistakes Companies Make When Launching New Products

There are countless examples of products/services that seemed like “great ideas” but never achieved commercial success. Some are more memorable because of the great publicity that surrounded them, but we never even heard of most of these failures. In most cases, these new products were created by smart people with seemingly good ideas, so how did they get it so wrong? In the rest of this article, I describe the top 10 mistakes that I have seen companies make that result in commercial failure in the market.

  1. The company thought they knew what was right for the market based upon internal discussions, their own hunches or the technology they had just developed. This approach results in a product looking for a problem to solve, which creates little market potential.
  2. The product solves a problem but not one that the economic buyer is willing to pay for. Often in these cases, the targeted user feels the need, and maybe even significant pain, but the actual buyer does not feel the need or has higher priorities, making sales very difficult to close.
  3. The market is too small. You often have this problem when one key customer or a top executive has undue influence on your product direction. The problem may be compelling, but a market of one (or a few customers) does not make for a market opportunity
  4. Everyone in the company contributes their latest feature du jour and there is no control over what actually goes into the product. The resulting product is delivered late, has too many bugs, does not meet the market need and is not competitive.
  5. Sales people and executives have no consistent market message. Without a clear, consistent and effective message, marketing and sales confuses the market and buying influencers.
  6. The product is ready, but no one knows how it is going to be marketed. This results in an anti-climactic launch and significant lost market momentum.
  7. The sales channel (including internal sales) has not been adequately trained on how to sell the product. Without this guidance, sales people try to sell the product to almost anyone, will tell them anything that they think they want to hear and will struggle to close sales.
  8. Not choosing a target market (or choosing but not focusing on it). Sales and marketing ends up wasting a lot of time trying to win deals in markets where they never really intended to compete, with little success.
  9. There is no clear means to prioritize product development and market segment investments. The company ends up investing in too many opportunities and loses focus on the opportunities that could really grow the company.
  10. Taking too long to get a new product to market. This has several impacts. You might find the product is not quite what the market needs, but you took too long to discover this. Or you end up missing the market opportunity altogether.

Over the coming weeks, I’ll address each one of these mistakes and explain what companies can do to avoid them or overcome them.