Delivering A New Product to Market Requires More Than a Mere Advertising Blitz
By Jeff Pelzel & Anne Quimby Mathias
Survival of the fittest—the strong conquering the weak. Considering today's competitive environment and shortened product life cycles, survival of the fittest most often pits the quick against the slow. Velocity, or speed to market, has become the key differentiating factor for successful product launches.
And it doesn't end there. Getting a product to market quicker is not the only important factor in achieving faster sales and an improved new product lifecycle. There are four critical factors to a successful launch.
Think back to your last product launch and consider the following:
Velocity: How long did it take from your product announcement to your first sale? How long did it take you to reach your revenue goals?
Process: Did you develop a solid economic foundation for your launch? How did you pinpoint the right target markets and functional titles for your product? Did your sales and marketing activities represent your product's differentiated value proposition? Was your sales channel prepared to convert inquiries into qualified leads and leads into sales?
Demand Generation: Were your launch activities designed to generate demand for your product, or were your activities more informational in nature? Were your activities built around knowledge of your customers? How did you build critical mass in the marketplace before your competition could get a foot in the door?
Measure, Learn, Improve: How did you determine if your product launch was successful? How did you use this information to improve your launch?
Most companies measure velocity from the completion of product development to the time the product is introduced to the commercial market. After that date is met, most launches either collapse into chaos or slide into obscurity. Organizations really should focus on the time it takes to fill the sales funnel and realize sales. The speed and methods used to fill the sales funnel will have the greatest impact on your new product's lifecycle—market penetration, product penetration and repurchase—because this is when you build your presence in the marketplace, often with little interference from the competition.
The biggest challenge for any new product launch is to get three disparate organizations—engineering, sales and marketing—to work together while keeping a focus on the customer. You cannot achieve this teamwork without using a systematic process to design, build and deploy your launch. The key components of this systematic process are: planning, customer definition, value proposition, campaign development and training/operations.
>Planning. To set a realistic economic foundation for your launch, significant strategic planning must occur with personnel from all key areas of the launch team—engineering/product development, sales and marketing.
>Customer definition. Successful launches employ a combination of methodologies to build accurate customer profiles. The most critical step in defining your customer base is to conduct primary research activities with your potential target markets. However, don't overlook the valuable insights that your sales team and customer database can provide.
>Value proposition. Most organizations don't use the deliberate processes required to transform a product's technical features into benefits and value for the customer or to understand how their new product provides differentiated value over competitors. You need specific processes, tools and direct interaction with real people in your target audiences in order to deploy the right activities and communicate how your product meets customers' needs.
>Campaign development. There is no single best approach to reach customers and generate demand. Developing integrated campaigns that employ a number of communications media and that reach deep into an organization greatly increases your likelihood for success.
>Training and operations. Once you communicate these benefits to your prospects and customers, how will customers move through the sales process? Successful launches incorporate opportunity management processes far beyond the typical launch (handing off some brochures to the field reps with a charge of "go get 'em"). The biggest waste of marketing dollars is to generate inquiries without having appropriately prepared resources to do a follow up.
Typically, organizations launch a product with some unrelated public relations activities and tradeshow participation. However, effective demand generation requires intensive integrated campaigns, specified by the needs of each target audience. Demand-generation campaigns must incorporate messages, offers, timing and media selections specified by the customer and which optimize each campaign element. Taking the length of the sales cycle into consideration, demand-generation campaigns must be timed to create the volume of leads needed to achieve revenue objectives.
Measure, Learn, Improve
If you can't measure results until six to nine months into your launch, or once you realize that sales are not meeting projections, it's already too late to make changes that will impact that year's revenue. Therefore, you must develop measurements that serve as an early warning device. Using your sales funnel as your measurement system is the simplest and most effective way to understand your results while there is still time to do something about it.
By building a sales funnel and estimating your response and conversion ratios, you can tell early on if you will meet your revenue objectives. If you're not generating enough inquiries and qualified leads, you're not on track to meet your revenue projections and you can adjust your launch activities accordingly.
Assuming tight execution on these four critical success factors, there is a high potential for creating compelling launch results. A successful new product launch in today's environment takes careful preparation, the right tools and processes, and a commitment to both the short and long-term challenges of reaching your goals. Yet sadly, most product launch activities are treated as not much more than an advertising, PR and literature blitz, whereby resources are wasted and sales opportunities lost.
Jeff Pelzel is senior program manager and Anne Quimby Mathias is director of marketing communications for Hunter Business Group, LLC. They developed a new product launch tool that increased the velocity of bringing products to market, increasing the likelihood of success. They can be reached at (414) 203-8060, or via e-mail at firstname.lastname@example.org or email@example.com.