6 Steps to launch a successful new product
Have you launched a new product only to later realise that you under-priced it hugely and left significant money on the table? This happens a lot and to many businesses. It happened to an automotive supplier to a well-known car manufacturer too. They priced their park assist at $100 based on costs and margin expectation. The car manufacturer recognised the value of park assist to its customers and sold it for $670. The automotive supplier left significant value on the table by failing to recognise customer value.
You don’t want to be making this same mistake! Launching a successful and profitable new product is hard! Many studies show that more than 70% of new product launches fail! If you are developing a new product, how are you ensuring that it will be successful and profitable?
The answer is to launch new products that add VALUE to your customers and your customers are willing to pay for it. New product launches fail because they do not add value to customers and because they are not priced based on value to customers. Selling on price is considerably harder for your sales team.
Very often, pricing of the product and its marketing is considered right at the end of the development and launch process. Product development teams can be internally focused and may not spend enough time listening to the voice of their customers.
A lack of deep understanding of customer needs, results in businesses overloading new products with unwanted features that add no value to customers, features that customers are unwilling to pay for and are therefore doomed to failure.
Do you have a robust process to launch successful new products? Incorporate these 6 steps into your NPD (new product development) process to significantly increase your new product’s chances of being a success:
Understand the needs and pain points of your target customers
Evaluate direct and indirect competitive alternatives
Design an offering that creates value
Develop a compelling value proposition
Communicate the value of your solution to your target customers - do not assume that they will already know the value
Capture a share of the value in your price by creating a win-win situation.
The outcome will be that the price of your new product is based on value and your business will not compete just on price.
