12 Jul Seven reasons new technology product development goes astray
CHICAGO – Developing new products is one way businesses can create organic growth (or growth other than by acquisition). The legendary expert in new product development (NPD) is Rubbermaid, which launches a new product every day.
New products can be sold into existing markets or new markets. The most difficult kind of development and launch is a new product into a new market. The easiest is a new product into an existing market (because your clients already know and love you).
The reality is that you can only capture a certain percent of the available budget from your clients and your market segments.
If you’ve already expanded horizontally (i.e. selling existing products to new markets) and if you want to continue to grow, you’re going to have to either buy more clients or products (by acquisition, merger, wholesaling or serving as a distributor) or make new products.
New product development can be extremely satisfying and lucrative. It can also flame out and leave you standing on the street with a little cardboard box that contains your worldly desk belongings. Here are seven common mistakes:
1) You don’t do enough client needs research and your product is a culmination of the best ideas of your engineers who are all sitting in a room together brainstorming snappy things that are fun but not functional or too functional for anyone to spend money on (i.e. they over deliver).
For example, the market wants only really basic functionality but your engineers know that with just a little more time, the product can do six extra cool things that they really love (but that the market won’t pay extra for and doesn’t care about).
2) You try to make one product that serves all segments but the segments don’t have the same needs, they don’t use the same terminology, they aren’t organized the same way or they already have the same functionality in another department.
3) Your sales folks overhang the market. Your idea is great but it takes too long to get the product built and launched and a competitor beats you to market.
4) Your sales materials are written by engineers when the sale is executed with CEOs (or they’re written by the technically challenged when the sale is executed with engineers). You fail to deliver the right message in clear, compelling benefit and impact terms.
5) You price commodities according to their use value or according to what you need to cover your overhead but the market doesn’t know about or understand the extra value. You’re out of the game because the initial buzz is that you’re too expensive when compared with better-known commodity products.
6) Your salespeople get paid more commission to sell the old product and they don’t push the new one.
7) Your sales, sales support and customer service people don’t know about your product or don’t have enough information and can’t answer questions about it.
There are many more I could list. You could forget to integrate with operations and the systems you need to support your products are being upgraded and will be out of commission for a month. You could forget to check launch dates and you roll out your communications plan just as Microsoft launches its hot new product and you’re forced out of the trade news cycles.
Perhaps you don’t accurately forecast the sales cycle and you run out of cash before you sell or before you’re paid. Perhaps you’re so successful that you need additional project managers but HR is in the middle of revamping your compensation system or annual reviews and you can’t find good people fast enough to keep up with the pace.
What’s the point?
Launching or running a business is challenging enough. Some days, you think your neck will snap from the weight of all the hats you’re going to have to wear. New product development is one area that must go as smoothly as possible and like atomic clockwork.
The real strategic value of marketing in the NPD process is having someone within the facility to think through the million and one things that might go wrong and the “plan b” that can be implemented so things keep rolling on schedule.
It’s having the vision to see how every move affects every other move you’ve made and the ones you need to make on the road to your revenue goals. It’s having the confidence to intuit and clearly communicate exactly what needs to happen when some people may only understand a single piece of the process or may have different goals and motives than making your product successful.
If you’re dealing with a marketer who’s rolling out a new product, it’s not time for Barney (“I love you. You love me.”). For them, it’s time for Clint Eastwood (“Go ahead. Make my day.”).
You can’t expect a nice series of feel-good meetings with politically correct fun snacks. They’re looking for people who can deliver on time a big freakin’ steak, lots of caffeinated coffee and time-released deodorant.
It doesn’t matter if it’s Christmas Eve. They are working anyway.
If you can’t hire an experienced internal or external marketing resource, you owe it to yourself and your investors to invest the time to fully understand what needs to be done as early in the process as possible so you can minimize your risk and avoid expensive and potentially fatal mistakes.
New product development is a series of parallel and serial nested logic problems on a roller coaster in the dark with bungee seat belts. It’s a great time. It’s a perpetual source of self-motivating adrenaline, but like the movie “Jackass,” it’s not something to try at home while hacking along without a user’s manual.
The reason Rubbermaid is No. 1 in this department is because it has a flawless process that has been proven over time and is standardized. Everyone marches in the straight lines that are drawn on the floor. Even if you’re not planning on being a consumer giant some day, this is one area in which it’s worth spending time on Six Sigma quality planning.
Cheryl Gidley is a former GE Capital executive and was the first chief marketing officer for the 650-attorney firm of Katten Muchin Zavis Rosenman. Currently, she is a managing partner at Gidley Consulting. Gidley can be reached at email@example.com. Her column Marketing.exe, which appears on ePrairie every Friday, is to provide pragmatic, relevant marketing strategies and tactics that are applicable to technology companies seeking results in a broad variety of industries. This article has been syndicated on the Wisconsin Technology Network courtesy of ePrairie, a user-driven business and technology news community distributed via the Web, the wireless Web and free daily e-mail newsletters.
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.