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New Products--Number 1 Lever to Increased Profitabality

Thu, 02/01/2018 - 1:07pm | by Helen Hoart

If you keep doing the same thing over and over again in your company, you may be in a downward spiral.  Why do the all the large companies introduce new products, new models?  Tastes change.  People's needs change.  Don't stagnate.  Think about innovating.

Why bother?  New products and innovations are  the number 1 lever to increased profitability and growth.
 
When thinking about a new product, think about it in terms of what it will do for your target audience or customer.
 
It should: 
•Solve a problem
•Add value to a customer’s life
•Meet unmet need in the market
 
But wait a minute, you say.  I know of plenty of new products from big companies that flopped big time.
 
Yes, new products fail and here's why:
 
•No compelling value proposition for the customer 
•Not differentiated, unique and fail to deliver superior value
•No up-front work
•Lack of market and customer insight
 
So it's not good enough to say we need to create something new.  You've got to do the spade work.  An idea is not worthy much unless it's put to the test. 
 
You can begin with a SWOT assessment, i.e. strengths, weaknesses, opportunities and threats about your business. .  SWOT assessments have been around a long time, but there's a reason for that.  They provide valuable insights.  If you work in a larger company, ask employees in each division for feedback. 
 
And don't forget customer service.  Customer service reps are often a wealth of information about customers, so tap into that knowledge. If you are in a smaller organization, you can still do an assessment.  It should be akin to taking a good look at your face in a magnifying mirror.  Don't be afraid to identify the flaws.  That's how you improve.
 
During the SWOT assessment, you'll look at trends in your market.  Is it growing?  Why?  Conversely, is it shrinking?  Why?  Is there a subset of the market that's do well.  What's your competition up to?  These are important questions to answer.
 
Once you know your strengths and weaknesses and have a good sense what the opportunities and threats are, you will start to move down the path of new product development. 
 
It's time to start brainstorming ideas. Ideas can come from a variety of places.  
  • The boss
  • Employees
  • Vendors
  • Customers
 
Other people to talk to: 

·         Purchasers those who make the decision (or write the check)

·         Influencers: the individual, organization or group of people who influence the purchasing decision

·         End users: the person or group of people who will directly interact with your product or service

 

In doing your research don’t ask:  Would you like product X

Instead probe and ask customers or prospects:

·         What are your problems?

·         What do you wish you had to do your job better?

·         What do you read for work?

·         How do you spend your day?

·         What’s your budget for …

·         What’s the process for …

Other research tools:

·         Competitive analysis      

·         Google Keyword research

·         Google alerts

·         Associations

·         Competitor products, marketing, customer service

·         Surveys

·         Focus groups

·         In-person (if possible) customer interviews

In this article I've laid out a method to use for new product development.  Good Luck!

 

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