In all my years developing new products, two things have remained constant.
1. Ninety percent of new products developed this year will fail.
2. Marketers will blame the failure rate on
- declining brand loyalty
- the current economic climate
- the failure of the planets and stars to align properly
The ratio of new product failures to successes hasn't changed much over the past twenty years. It won't change as long as products continue to be built backwards.
In the traditional new product development program, Research and Development (R&D), marketing or some misguided, overextended entrepreneur comes up with an alleged breakthrough idea. They pray to the marketing gods that they can sell it to someone. It doesn't seem to matter that there may be scant demand for the product because our manager or entrepreneur is too wrapped up in trying to make the damn thing.
The smarter way is to determine what the consumer want to buy in the first place and make it for them. It's easier. Almost painless.
However, most companies continue to develop products that they want to sell, rather than what the consumer wants to buy. This is especially sad in the case of smaller entrepreneurs who spend their life savings developing and attempting to market their product when they could have saved their money and their sanity by spending some money on up-front groundwork and research.
Dealing with consumer in the early new product stages is your head start on the competition. You're going to need this head start, because if your product is a success it's going to be knocked off a maximum of six months later by the competition. Consumers should be brought into the new product process at the very beginning...when the product is in the germination stage. The on-track new product process is not only about differentiating between good and bad...it's about evolving a good idea to make it the best it can be. Working upfront with consumers is they key.
A successful effort doesn't begin with a product, but with positioning research that identifies an underlying consumer need. Finding the optimum emotional hook is the single most important aspect of creative marketing and is as important as the Big Idea. It's the vital right-brained message you send that causes the consumer to make a commitment to your product.
THE CORRECT APPROACH
My approach to product success is a proactive approach. It's deceptively simple. Based on a clients resources and goals, I hypothesize products and benefits that can be produced by the client. At the same time, I guess at needs that can be satisfied by these hypothesized products. I probe for consumer reaction by showing consumer's real-world advertising featuring products and putative consumer benefits. Ideas are continually evolved until an Epiphany is reached. At that point, I will have learned what products the consumer wants. I will have also gleaned the hot buttons that make them want it. When that happens, I have a winner.
In short, I create hypothetical products and put them in a real world setting. When consumers say "Yes, I'd buy the product", I know I have a winner.
While there's no "black box" that will take all of the guesswork out of product development, this procedure eliminates most of it.
FAUX ADVERTISING -- THE PATH TO EUREKA
I work the product out on paper in the form of mock full-color ads. For most of us, advertising is the key twentieth century communication that we react to. We want consumers to react just as they would do in the real world so we produce these ideas to stimulate the consumers to give us their gut feeling about their purchase intent.
These ads contain:
- product names
- positioning and usage suggestion, "lifestyle" etc.
- original packaging and delivery configurations
- original graphic and verbal imagery
Why ads? The writing of ads forces you too look at your product from a marketing standpoint. How you sell the ultimate consumer can be just as important as what you sell. Consumers are neither rational or consistent in their purchase habits. If you can't sell the product or service with an ad that focuses on a single selling proposition, the chances are you won't be able to sell it at all. When you sell your product, you're going to have to communicate your product to someone. Doesn't it make sense to get a head start on the process?
Why ads? Because paper is a hell of lot cheaper than prototypes. Ads allow you to experiment on paper every step of the way and validate every part of your product before you physically make it. They will help you find fatal flaws faster. You can create twenty or so full color concepts with a unlimited variation of ideas for the fraction of the cost of one product prototype. Why ads? Because you can keep the creative envelope stretching until it snaps. The nice thing about doing the preliminary work with ads and instant consumer feedback is that you don't have to be afraid to make mistakes. You can explore every creative whim. Ads also allow you to make modifications to your product before it goes into the real world.
People often ask me, "How can you develop an ad for a product that doesn't exist." Why not? The people who write the ads and produce the tantalizing coming attractions for movies do it all the time. The ads, TV commercials and trailers are finished well before the movie is produced. Have you noticed that you can often see a trailer for a movie that doesn't come out until three or four months later.
Most major movies are pre-tested too, just like in our process. If the ending doesn't play well the producers can change it. If the characters don't play well, they can be fleshed out in the editing room. Imagine how bad Kevin Costner's box office flop Waterworld would have been if it were not fixed up after consumer testing.
BUILDING YOUR PRODUCT FOR THE CONSUMER
These ads are shown to groups of consumers who represent what you think is your target market. The key is to get consumers to react, because in the real world consumers react to everything they see. Consumers don't theorize or intellectualize. They simply buy or don't buy.
When we show these ads to consumers, several things can happen.
- They may like the product but hate the positioning
- they may like the positioning but hate the product
Or they may give you the dreaded "I'd buy it if I had a coupon" response -- which means they won't buy your product. Usually, you'll find that ninety percent of your ideas will be shot down for various reasons. Isn't it funny? That's about the same rate as new product failures. Any one of these products or positionings would have failed in the marketplace. Fear not rejection at this stage. Because you haven't squandered any money or resources. Remember, this is just paper. The focus group will seem like your adversary, but they're really your partners in success.
BACK TO THE DRAWING BOARD
After the first round of groups, it's time to lick wounds and regroup. At this time, however, you have an incredible amount of learning in your pocket. Now you take your ads one by one and study them. What works you leave alone. What doesn't work you either throw out or improve.
You can change --
- your product
- your positioning
- your selling premise
After each wave of groups (and between individual groups, if necessary), the concept inventory is totally modified.
Based on your prior consumer reactions, you can --
- add new concepts,
- drop concepts that didn't work at all,
- modify those that seemed to have some merit,
- keep the strongest concepts which will serve as benchmarks to beat in your next set of groups.
Then you take our revised concept out to new territories -- wherever you think your target market is. If your product is national in scope you would take your product out to geographically diverse area so you would get a representative sampling of the United States. If your product is regional, you would go to those areas that represent your target market.
This is continued until --
- synthesis of the most promising actionable products are realized
- positionings are defined
- purchase motivations are determined
At the conclusion of the groups, the concepts will have gone through a comprehensive set of tests to confirm their validity, their communications value and their impact. You will have evolved strong, winning, advertisable product concept(s) that can be readily implemented . Your winning products and strategies will have struck a "targetable nerve". Moreover, these concepts have developed from expressed consumer needs and tested to make sure these needs were met by your product and positioning.
A TOUCH OF SERENDIPITY
In almost every program, something weird will happen. Consumers will give you a product or a positioning that you didn't think of before. This almost always happens. If you get such an idea, run with it. Stay flexible and you can make your new product dreams come true. Remember, Kinko's didn't start out as a copy shop.
THE SMILE TEST
The president of a successful ceramics company has her own take on the new product process. Although it's on a somewhat smaller scale and less scientific than our program, the principle is still the same. Before she invests in a new product, she shows the design to potential buyers. "When I come up with a new design, I show it to my potential customers. If they smile when they see it, I know I have a winner."