When your products fail to sell, some may argue that the answer to problems lies with product management, while others look to marketing and sales to answer questions. The answer is typically the problem is created by new product processes from development to launch not being followed from the outset.
New Products are Tools for Growth
Companies invest heavily in product or solution development as it provides them with a platform for growth or expansion into new markets. A successful product is directly related to top-line revenue gains. Everyone is invested in the development, taking the product to market, and is passionate about what results should come from the launch. New products are exciting for companies.
But too many companies are disappointed when the product fails to gain traction in the market that they planned or hoped would be achieved. The lacklustre results undermine the company’s overall achievement of sales goals and market share, let alone the financial losses that may stem from when products fail to sell. They can be bad for company morale too.
How It All Starts
Seeing other companies with subpar products continuing to increase their market share can be disheartening for those in executive or sales positions. Companies may also see opportunities for new products to enter a market and feel there is only a limited window to take up the opportunity. Industry expertise and longevity of being in an industry often give people a sense of following their instincts as a priority over following the processes for new products, as it takes longer and more resources.
How It Starts to Go Wrong
We see this time after time in businesses. The excitement of a new product overrides the due diligence of sound market research and product development as people look to rush to the market. The research is done on a new product by initially offering it to some existing customers who gave great reports and feedback. Of having conversations about a potential new product to see if it sparks any interest.
The problem with this approach is, these are customers that are known to you, unlike new buyers. Therefore, the predictability of good feedback would be high as they have been selected on their propensity to provide good feedback. This is a small pool of testing and does not reflect the overall market creating poor foundations for a new product launch.
The testing of any product is to research new customers and unknown markets. They provide the best feedback and can demonstrate how hard the product will be to sell and what value they see in the offering. If you go to market and the new customers are not knocking down the doors, you have a problem. If you are getting all positive feedback, you need to dig deeper as no product is accepted by everyone immediately.
Getting the Fundamentals Right When Products Fail to Sell
If you have gone to market and are not pleased with the results, it’s time to review the barriers and make the necessary adjustments. It is essential to begin inquiring and viewing your product from a new perspective in order to prevent it from failing. First, you must look at your go-to-market strategy when your products fail to sell.
Thoroughly researching potential new customers and markets will give you the hard evidence and feedback you need to continue with a product. Asking well-designed questions that do not control the narrative of the responses is particularly important. For example, are the customers willing to pay for the product and how much? Do they see the value and rate it as a superior product?
If the research is still showing there is a need for the product and potential market, it is viable, then you need to explore your communication with the market. The next points to review are:
- Does your marketing communicate the right information to generate interest?
- Does your marketing convey value to the customers?
- Does your marketing educate the market about the new products
- Do you have a sufficient marketing budget to reach audiences consistently?
- Does the marketing generate a reasonable response rate of qualified leads?
Your go-to-market marketing strategy commonly relies on investment and focus to generate interest, educate and create leads for sales. Marketing is often under-invested and undermines the potential of a product. Your brand name does not automatically mean success for a new product. Is a new marketing strategy required?
If the marketing spend and marketing communications are deemed effective, you then need to look more closely at the types of barriers you are experiencing.
Overcoming Unplanned Barriers to Market
Closer scrutiny of the market’s barriers is necessary to clear the way forward for new products. Launching new products can change the competitive landscape and how you go to market. For example, you may have aggressive competitors that quickly pivot to block your new products.
Let’s look at some barriers more closely.
- Is there a product conflict? Are there any unexpected issues preventing people from buying your product? You completed the confusion test, so it isn’t the issue, but could something else be blocking customers from buying it? Perhaps they already have existing products or solutions that this new product would conflict with, stopping them from making the purchase.
- Wrong customers are attracted to the product. The product was released, but the wrong people have been inquiring about it, as it may not necessarily be able to assist them with their issue. Could it be that the marketing team has either not properly understood the product’s problem-solving capacity or written incorrect information? Are salespeople trying to open up opportunities by addressing issues the product isn’t equipped to handle?
- Have you attracted new competitors you did not plan for? Have unexpected competitors entered the market and begun to take away your customer base? It’s possible the threat to your business might not be from a direct competitor but from a company providing a substitute for your services. As a result, you will need to adjust your strategy in order to make a better argument for why your services should be chosen over theirs.
- Are the product differences insufficient to sway customers? Has the company overestimated customers’ need to change products? The customers are satisfied with the current products, a little disgruntled from time to time, but not sufficiently aggrieved to use new products. This can be the case with products used in manufacturing or engineering processes.
- Is your new product causing your buyers to be uncertain? Customers will not purchase something they cannot comprehend, and if your product differs from their standard ideas, they could become baffled. Therefore, it’s important to consider if any of the following are true. (1) Is using the product and how it works in the customer’s environment challenging their preconceptions? (2) Is there a lack of clarity in what your product offers and the value it adds to the market?
- Have you encountered unexpected competition? It’s possible that they may not be direct competitors, but they could potentially provide an alternative solution to your customers. As a result, you must rethink your competitive stance and create an even stronger argument that outshines theirs.
- Are there any unforeseen obstacles to your product being purchased? You have done a test to check for the confusion, but it appears that the product is not selling. Could it be that the customer has other products or solutions that contradict this new product and thus hinder their buying ability?
- Are your customers having difficulty understanding your new product? If it deviates from the norm, it may be uncertain. Consider if these scenarios are true: (1) Is the product’s usage and how it works in the customer’s environment challenging their preconceptions? (2) Is there confusion about the advantages of the offering?
How robust is your sales and marketing strategy? Are the potential scenarios that could arise during sales calls that should have already been taken into account in the plan, or are salespeople encountering them as they go along? There are many reasons why products fail to sell. To avoid failure or minimise losses, the correct measurement systems must be in place to identify the chasms in the product offering, marketing, and sales strategy.
As a leader in an organisation, it can be disheartening to witness other companies whose products are not as good as yours gaining more attention and customers in the marketplace. It is necessary to start inquiring and examining your product from a different perspective in order to prevent it from failing. If you believe you can improve your measurement systems of marketing and/or sales, please contact us and discuss your specific situation.
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Articles you may also be interested in reading:
- Product Differentiation: Has Your Company Lost It
- The Real Cost of Growth Strategies
- Customers Struggle With Why Change When You Launch New Products
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