75 Reasons Your New Product is Going to Fail...and What You Can Do About It
Harsh words, right? But a quick Google search and you’ll see there is no shortage of content on the topic of failed products.
Has personal experience taught you that this is true? Or does your heart (and the fact that your livelihood depends on the successful launch of a new product) prevent you from believing it applies to you? Are you thinking:
This article must be written for the other 19 idiots out there…not me. My product is different. I’m smarter. I’m working harder. That’s why I’m in the 5% that succeed and why I’m not going to make any of the mistakes everybody else makes.
Academic research generally indicates 75% to 95% of all new products launched in the U.S. market fail, but there is debate over the bias many organizations might have to publish inflated numbers. These numbers also depend heavily on:
How you define failure: Is it not reaching sales objectives, not delivering sustainable profit, or something else?
What time period you measure: How long does a product need to stay in the market to be considered successful?
How you count the population of “products”: Is it the entire brand or individual skus? How do you evaluate a brand that launches with 6 skus, but only two succeed?
How can 19 out of 20 products possibly fail?
How can profit-driven companies staffed with smart, ambitious, experienced experts have such a painful record of failure?
How can these companies continue to pour money into lost causes?
Why would a well-designed product meeting an unmet need not find its place in the market?
The Number Doesn't Matter...But It Is Going To Get Worse
The purpose of this article is not to argue for any particular success rate. I don' think that number matters if we can all agree that products fail at a far higher rate than anyone would prefer.
And I would argue that failure rates are likely to increase in the future based on two assumptions:
The amount of brick-and-mortar shelf space for most categories is remaining constant. Retailers may be constantly building new stores, but they have all but stopped building larger stores. This means there is a fairly finite amount of shelf space within the four walls that may be redistributed across categories, but is not growing in absolute.
The number of new products is increasing: In categories that are stagnant and not growing, stealing share is the primary path to sales growth. New product introductions are one of the go-to solutions to drive share. At the same time, the barriers to entry for new products are dropping. Virtual companies need little more than high quality renderings (prototypes are optional) along with accurate production cost and timing estimates from a foreign factory to pitch their product. At the same time, almost anyone can put any product up for sale online through their own domain or retailers like amazon.com.
This world of constrained demand (finite shelf space and category size) and increasing supply (more new product being offered) inevitably leads to a smaller percentage of new products gaining the distribution and sales they need to be sustainable.
*YES, This is obviously an over-simplified view. It ignores many contributing factors that could change how success is defined for products (i.e. lower production and distribution and overhead costs could allow a product to be sustainable with significantly lower overall sales; markets might become increasingly fragmented and niche, creating the need for a larger assortment; etc.)
WHAT DO WE KNOW?!?
For over a decade, we’ve helped over 100 companies take steps to beat these odds as they launch new products that attract incremental buyers and deliver incremental profit.
Along the way, we’ve learned A LOT about what it takes to launch a successful product.
While I’m certainly not the first to the party, you’ll also see that most existing online content is pretty superficial. And many of the articles are very incomplete “top 5” or “top 7” lists.
I want to give this topic the attention it deserves. I also want to make the information digestible for an audience that I know is already overworked (many who are probably trying to save a new product from failure right now).
To this end, I’m going to publish an extensive series of articles to capture all the mistakes I’ve learned cause products to fail. As I am writing this introduction, I have already outlined 75 separate factors.
Doing it this way should way make it easier to read through the lessons at your own pace (each article will be about a 5-minute read). It should also give you enough time to fully process each lesson and (most importantly) apply it to your business.
PACE YOURSELF
I encourage you to pace yourself as you read these. While I hope I’ve written material that draws you in, I also want to make sure you apply what you read. In my experience, this requires a sequence of learning, understanding and acting.
May I recommend reading these posts at a rate of no more than one per day. Most readers will have heard and applied some of these lessons. Other lesson may not apply to your particular product. However, I doubt that many readers will know all of them. After reading an article, take time to think about the lesson within the context of your business. Then, decide what needs to be done to make sure you avoid making that mistake in your business.
Without getting to the point of application, all these words become little more than an academic effort. It is useless theory that does nothing.
I’m sharing my knowledge to make the world a better place (and hopefully acquire a few new clients in the process). I want to see more companies have more successful products. I want to see retailer shelves get less clogged with products on the path to failure, freeing up space for more products that are adding value to the retail universe.
If you don’t have the time or expertise to address some of these areas on your own, we’re here to help. CONTACT US for turnkey solutions to dramatically improve your odds of success.
Enough with the long preamble. Let class begin with the single biggest mistake companies make when launching a new product. (Spoiler Alert: this first mistake conveniently also gives you incentive to continue reading the entire series.)
MISTAKE #1: You think one exceptional component will compensate for failures in other areas