If you’ve considered launching a new innovation to grow your top line, you’re not alone.
According to Forbes, 250,000 new products were introduced to the world in 2010 alone. We’re overwhelmed by so many new product entries, which range from sophisticated new technologies like the Nest thermostat and infomercial sensations like Pajama Jeans. To complicate things, brands are introducing new line extensions like Kraft Sizzling Salads, Disney Appmates, and a wealth of “new and improved” products from venerable brands like Gillette and Kleenex.
But the fact remains that the success rates of new product introductions and innovations have improved little over the last 20 years. Booz & Company reports 66% of new products fail within two years, and Doblin Group says a startling 96% of all innovations fail to return their cost of capital. This is due to a number of factors, including economic conditions, an explosion of consumer touchpoints, shifts in decision-making behavior, and the deluge of information marketers have to sift through to ensure they are up to speed with the latest trends.
Here are 8 steps any company can follow to increase their odds of growth and transformation through a new product launch:
1. Address head-on the number one reason for failure. You can’t fake it if an innovation has no clear or compelling relevance to people’s lives. Companies often refuse to acknowledge a new product or service idea serves no strongly identified customer need, and they try to retrofit their marketing to compensate. Start by identifying a relevant, resonant role you could play in people’s lives. Then develop offerings and experiences that deliver it in a peremptory way.
2. Focus on the most critical rule of thumb for growth today—customer acquisition. Get as many quality customers—even light, occasional users—as quickly as possible. More customers mean more sales, share, and with that, conversion to loyal, heavy users. In addition, new customers have a key attribute that every marketer should leverage—word of mouth. Forrester Research concludes the most valuable customer today is the one that may buy little but whose blog postings, online product reviews, and favorable word of mouth gets 10, 50 or 1,000 others to buy. The longer people are with a brand, the less they talk about it, but new customers are more likely to recommend a brand to their family and friends.
3. Face what you must really accomplish through Facebook. Nielsen reveals that the number one reason a Facebook user “likes” a brand is to receive a discount or special offer. Their research also shows 84% of users who “like” a brand on Facebook never return to a brand’s page after exercising the incentive that got them there. This means the typical marketer’s Facebook strategy is doing little to grow their customer base, and worse, it could be inadvertently and dramatically hurting their margins. Marketers must ask themselves: What—beyond a discount—will both incent new customers to like my brand and habituate their interaction with it?
4. Think faster. With the impatience of bosses and investors today, you can’t just obsess about how to quickly add quality customers. You also have to obsess about how to add them faster than anyone else in your category. Growing a customer base quickly is unlikely to come from building an e-commerce site and expecting people to find it only through search and blogs and Facebook. Getting lots of new customers quickly requires some sort of mass reach. From the Advertising Research Foundation (ARF) to the World Advertising Research Center (WARC), the findings are quite consistent: Mass reach from traditional media is—at least for now— still the most effective way to grow a customer base. It’s also the quickest way to jump-start search, online relationships, and e-commerce. Even the “most viewed” YouTube videos get their biggest jolt with a mention in mass media. The very thing that can’t be done in social media is what traditional media does best: jump-start conversations. Social media then fuels these conversations.
5. Don’t be fooled by the hype. Contrary to the buzz about the power of social media and apps, adding TV to the media mix still proves to be the most effective way to jump-start growth. One particularly interesting case is that of KAYAK.com, which launched only online and grew steadily over two years without mass advertising. Since adding TV to its marketing mix last year, sales experienced a dramatic lift. TV exposure can—even weeks later—drive a potential new customer to search for you.
6. For maximum ROI, perfect your mix. It’s a waste of time to debate whether TV or Facebook delivers it best. It’s more important to identify the ROI of the media mix that advances people through the purchase funnel—what medium best engages to drive a consumer to deeper engagement in another medium, and then habituates engagement or converts the interaction to a sale. Identify the mix that leads to the best conversion rate and then work continuously to improve it.
7. Map your measurement. Many marketers say they know the media or touchpoint path their consumer takes on their way to purchase—until asked to map it visually. Plotting the path takes a chart with a horizontal axis of touchpoints, and a vertical axis with the steps and stages of the buying process. Identifying the elements of each axis and then tracking the order and incidence of each forces marketers to confront what they know and don’t know, like: What is the entry point into people’s lives for a new category or product? Where and when can one maximize reach? Where are people falling off the path to purchase? What message is best at each touchpoint to move a person to the next stage of their decision-making? The ultimate benefit of mapping is identifying the mix of touchpoints and messages that drive the best conversion rate. It’s almost never one medium or message but a mix that, with the right analytics, can always be improved and optimized.
8. Prepare yourself: Your launch never ends. Marketers must face that their launch will be forever in beta, a state of continuous improvement that prevents the brand from losing momentum, or worse, stalling out. Studies confirm that marketers who assume their launch is over, who pull back, who stop innovating, or who let share of voice fall below their market share, do not fare well.
While embracing any one of these ideas can make a difference in the launch of a new initiative, really increasing one’s odds of success will come from bringing them together in a comprehensive strategic marketing plan. As so many successful company leaders have confessed: The best way to predict the future is to create it for yourself.
This article first appeared on FastCompany.com