DEMAND CREATION + REALIZATION

Improving Product Launches

If anyone ever tells you they hold the magic formula for a faultless product launch…calmly shake their hand and walk away. You either just met a statistical anomaly or, more likely, an overly enthusiastic self-deluder.

Henry Ford, a man who was no stranger to big ideas and tireless execution, once said:

"The best we can do is size up the chances, calculate the risks involved, estimate our ability to deal with them, and then make our plans with confidence."

Ford’s assertion makes intuitive sense, yet when one studies the history and application of new product launch efforts in this country, the results are bleak at best. Put more bluntly; while launching new products is absolutely essential to the growth of businesses, it turns out companies are actually terrible at it. In fact, only 1 in 10 new consumer products and only 1 in 4 business-to-business products succeeds.^[1] Why? Extensive research and over a decade of first hand experience suggests there are no silver bullet answers. What makes one product successful and another a dud is the result of hundreds of decisions and factors.

Consider the example of the Apple Newton, which launched in 1994 but never gained traction, only to have the Palm Pilot become an overnight success just two years later. Both had similar functionality, applications, look, feel, and target markets. Much of Palm’s success according to many, grew from the lessons learned from the Newton’s failures, and in fact one of Palm’s founders was an ex-Apple employee.

We don’t believe in silver bullets; we do believe fundamental principles can guide successful product launches. In this article, we explore common blunders in the product launch process and proven ways to improve your chances for success.

Getting started

Have you ever heard someone explain away the complexity of an issue by deferring to the old adage that it’s a mixture of art and science? We have. Yet, product launch truly is a mix of art and science. The tools used in the product launch process, such as market sizing and market research methodologies, alpha and beta frameworks, launch checklists, etc., are “the science”, whereas, deciding on which tools to apply and how to apply them, is “the art”. The fundamental question of every launch is which tools are necessary to effectively explore the risks and assumptions involved with your product or service?

Why Good Products Fail

Although we at CMG Partners have fine tuned product launch and new market segment entrance frameworks over the years, describing it might take a book. For the purposes of this article, we categorize the three critical areas where organizations most often stumble very simply as:

1. New ideas without customer input & validation are risky…

Perhaps the biggest misstep early in the launch process is one of the most fundamental, and it starts with the source of the idea itself. Great ideas are not easy to come by. Maybe that’s why the genesis of most new products is internally driven. In fact, according to one study nearly three-fourths of ideas come from internal sources, while only one-quarter come from external sources.^[2] Put another way, most of the time a new product idea is put in the development pipeline, it is based on a company’s internal perspective as opposed to that of their customers.

If the lack of external idea sources isn’t scary enough, the same study found that half of companies admitted they didn’t even talk to their target customer during the development process! That’s right. 54% of companies do not talk to customers as part of their new product development process!^[3] Not all companies miss the mark obviously. And some progressive companies, such as LEGO, even employ innovative techniques like ethnographic research in their product launch process; observing children at play with prototypes in their homes. Not only is it important to talk with actual customers while vetting an idea for launch, but you should also take a checkpoint against the market in general. Pairing comprehensive market analysis and customer insight can significantly reduce the risk of product launch failure.

2. “One size fits all” NPD approaches don’t address critical risks

Much attention is paid to the process companies use to introduce new products and services to the marketplace. Companies employ everything from the tried and true stage-gate process to the more contemporary rapid experimentation model. While many of these processes provide much needed structure, they often fail to address or focus adequately on the unique risks associated with any given product. At most companies, a single standardized NPD process is applied in a bureaucratic fashion to every new idea. Instead companies should start with the idea itself and then build the process out from there, applying only the relevant elements of the process. An underlying layer of process is important because it ensures discipline, tracking, and delivery. Just as critical, however, is leaving room for flexibility – understanding when to focus the process on one area say, while de-emphasizing or skipping another versus strictly and blindly following each step in the process.

Often what happens in a regimented product launch process is the procedure becomes an exercise in robotic check-listing. Ideally, the chosen process (or adaption thereof) should be designed to focus on the unique risks and opportunities involved with the product/service in development. The length of a process is not a problem in and of itself; however an overly exaggerated or complicated process can end up prolonging the effort and investment sunk into a product idea that truly doesn’t have legs. Steps end up being fit to the cadence of internal meetings rather than the work. Chris Kelly, a serial entrepreneur, said it best at our Executive Forum on Product Launch in Durham, NC when he said, “If you’re going to fail, fail early.”

Even companies with formal new product development processes often fail to adequately address the two major areas of risk for new products; market risk and technical risk. Most companies focus more on technical risk than market risk, yet underestimating market risk is often a costlier mistake. Analyzing market risk requires constant and continual review. Critical risk questions to ask throughout the process include:

• Does the product meet an unmet need in the market?
• Is our product adequately differentiated and compelling?
• Will we be able to launch in time?
• Can we meet the necessary price target?
• Can technical hurdles be overcome?
• What are the competitors doing?
• And as the launch nears, has the market shifted? Is the need still there?

Anyone who has launched a major initiative or idea in an organization knows sometimes issues arise not because of the plan itself, but the people carrying it out. This is particularly true of a company’s launch process. Mark McNeely, Chairman & CEO of Intelevision, advocates appointing champions by “pairing a pragmatist with an evangelist”. A successful product launch requires an "idea person" to carry the vision forward and a "make-it-happen person" to do just that! Together they balance each other, pushing the innovation envelope while grounding the idea in reality to ensure that it can make it to market. Success requires energizing and pushing the organization and such a team builds internal confidence.

3. Failure of Go-to-Market efforts kills the chances for success

Depending on the type of organization you’re a part of, you may have already recognized the tell-tale signs of “Marketing under-appreciation”. It sounds a little like this: “When we launch our product, we’ll follow the usual process (e.g. issue a press release and stick it on the website).” Tossing a new product over the wall to Marketing for last minute promotion is not the course to successful product launch. Products don’t just stand on their own. Value propositions are built on more than just product features and require market explanation and direct and pertinent communication to target markets. Channels need education and incentives. Innovation and technology alone are just not enough!

Of course, a weak marketing effort can also blunt the effectiveness of a product launch. Craig Merrigan, VP of Global Consumer Marketing for Lenovo, warns marketers to “avoid blandness like the plague.” In the launch of its ThinkPad X300 Notebook PC, Lenovo used a creatively positioned (and very funny) viral video to demonstrate that Apple’s Airbook was not as thin or complete as the ThinkPad once all the necessary peripherals and USB add-ons were attached (check it out for yourself by clicking here). The humorous video became a YouTube sensation, racking up almost 1.5 million views as of the date of this article.

Beyond that, Lenovo actually gave BusinessWeek an insider's view of the X300’s development in a cover-page article titled “Building the Perfect Laptop”. Although sometimes risky, these and other innovative marketing ideas enabled Lenovo to create a differentiated message and promote its product against a much better resourced competitor. By incorporating go-to-marketing early and throughout the process, companies will increase their likelihood of success.

Bringing it all together – increasing your chances for success

If the above principles seem too fundamental, it is worth noting that forgetting the fundamentals is where most companies get into trouble during their launch processes. So, the next time someone professes to know the secret to launch success, remember there is no silver bullet, only powerful lessons that can be learned over time and some core principles to guide you.

^{[ 1 ]} R.G. Cooper and E.J. Kleinschmidt, "Winning business in product development: Critical success factors". Research-Technology Management 39, 4 (July-August 1996).
^{[ 2 ]} Ibid
^{[ 3 ]} Ibid