Kill Early and Kill Often: The Key to New Product Success
The latest research from Stage-Gate International indicates that success rates for new product introductions are improving. We used to hear that anywhere from 75% to 90% of new product introductions failed to meet their revenue goals; now we hear about success rates of 62%. While that is certainly good news, innovators are under persistent pressure to improve these odds.
So what is it about these more successful product introductions? They tend to come from companies with a well-defined product development process with strict criteria for go/no-go decisions. This leads to more new product successes and fewer post-launch failures in the marketplace, which can be expensive and embarrassing.
Stage-Gate International explains, “top performing organizations also have a higher percentage of product cancellations before launch when compared to bottom performers. The percentage of pre-launch kills is greater than commercial failures for top performers, while bottom performers have a higher percentage of failures than kills.”
Why Stuff Fails
Joan Schneider and Julie Hall, writing in the Harvard Business Review, identified “40 Ways to Crash a Product Launch.” Aligned with each product development phase, the reasons ranged from a faulty product development process to misguided sales and marketing.
Among the 40 launch-crashers cited by Schneider and Hall, there are nine that can be directly addressed by better understanding the customer:
- No marketing research on the product or the market has been done, at all. (This is painful to read.)
- The product is interesting but lacks a precise market.
- The product is untested by consumers; only the company can assert its benefits.
- The launch is aimed at the wrong target audience.
- The ad campaign is untested and ineffective.
- Line extensions aren’t test-marketed as thoroughly as the original product, so they fail.
- Consumers don’t understand how the product works.
- The product is priced to high.
- Consumers are unclear about who the product is geared.
Get Better at Killing Concepts
“Kill early and kill often” should be your mantra. But, how do you make your new product development process a ruthless concept-killing machine? Do your homework.
Customer input and rigorous analysis gives you the weapons to identify and eliminate weak concepts before you invest too many resources. Indeed, the more you know about customers and their needs, the less likely you will be to have to kill a product before or after launch. So “kill early and kill often” by supporting the new product development process with the information and research necessary to improve the odds of market success.
Marketing research can provide information for both new products and revitalizing existing products. Given the costs involved in innovation, research and development, commercialization and market launch, investing in marketing research in the new product development process is simply good business.
To learn more about integrating marketing research into your product development process, contact Kip Creel at Standpoint 770.270.4800.