Creating and launching new products and services is fraught with risk at the best of times. You only have to look back over the last few years to see the landscape littered with innovative new products that ultimately failed in the marketplace.
Some, despite having truly unique differentiation, struggle and never deliver their market promise. So what’s going on?
One of the critical reasons for the failure of an otherwise unique product is its ‘value proposition’. No matter how innovative a product may be, if it is fundamentally mis-aligned with the needs of the marketplace it will be doomed to fail.
Businesses that have previously relied upon a stream of innovative products to uniquely position and differentiate them from their competitors are discovering that the intensification in global competition is making it too easy for competitors to knock off any new product or service in a few short weeks or months. Basing corporate brand positioning and differentiation on innovation is no longer an effective strategy.
New thinking is emerging, which concludes that product design at it’s best, encompasses far more than the development of innovative features. When great, it is founded in in-depth customer research. Taken further it can also represent an ethos, which when embraced by every corporate department has the power to transcend and create a unique, differentiated brand positioning.
Here are a few more strategies that can help improve the odds….
- Understanding economic value. If we apply a scientific approach to evaluating the benefit of our products or services relative to the price of the next best competitive offering we can begin to see the competitive features (both positive and negative) that justify the price customers are prepared to pay. During the purchase process customers make trade offs between the value that each product creates and the price they are being asked to pay. Understanding the ‘value drivers’ can give you the opportunity to engage with your customers in a more effective and profitable way.
- Introduce ‘value gates’ into your development process. Most development processes involve a series of tests that products must pass through to move on to the next phase. By introducing a filter that ensures new product ideas have at least one economic value driver will ensure poor ideas are rejected quickly and accelerate the rate at which positive new ideas are advanced.
- Use depth interviews to build accurate value estimation. Customers are unlikely to understand the value of new products containing new features that promise to satisfy new needs. So the trick here is to explore how the new product impacts the customer’s business model and gain a rich understanding of the value it creates. Ideally these interviews should be conducted across key segments. The objective is to validate which product variations actually deliver the value that was estimated.
