The New Product Development Process – 5 Steps To Reduce The Risk Of Failure

The reality of the B2B new product development process is very different to what much of the standard marketing literature would like us to believe. It imagines a blank sheet of paper and sufficient company resources to develop new products without a driving customer.

Few, small and medium sized businesses are in such an enviable position and, those that are tend  to be concerned about the substantial financial risks associated with new product failure. However, the lead customer approach is not without its own set of problems.

As the lead customer often contributes financially to part of the development costs they can require specific modifications that make the product less applicable to the general market and impose restrictions on sale of the product to certain market segments. With the safety net of a known first customer marketing departments can be lulled into a false sense of security and fail to research and plan the new product launch and growth as they should.

Product Marketing Research And Planning Is Vital

In a recent post on product innovation we discussed the importance of a robust new product screening process. If a new product is customer driven this process may be less rigorous than it should be or overlooked entirely. This is one of the major reasons new product introductions fail or progress no further than the lead customer. The market should be segmented appropriately, likely targets for the new product identified and segment specific marketing plans assembled.

What worked in the past has a significantly lower chance of success today. A business with an established customer base could once rely heavily on a new product press release in a number of trade specific magazines, perhaps some limited product advertising and the sales force to beat on doors, set appointments with prospects and introduce the new product.

Switch From Outbound To Inbound Product Marketing

Today, many trade publications have either closed down or carry a fraction of the content they did in the past as the readership has collapsed and moved to the internet as a source of information. The decline in the impact of push marketing including telemarketing, advertising and, to a point, Email is well documented.

Inbound marketing by contrast is based on building marketing collateral and content and using this to build awareness, credibility and to support the sales process. This requires a significant amount of time and effort so content production must begin well in advance of the product launch.

Content should be produced (or existing information modified) to specifically match the requirements of the plan. Sales should be brought into the process at the earliest opportunities to ensure their lead prospecting and nurturing activities will be properly supported.

Delivery channels for content, be they online or offline, must be adequately researched and readied before the product launch. This is of vital importance and is a subject that is often overlooked, there is little point in talking if nobody is listening.

Integrate Sales And Marketing

As mentioned above marketing needs to work closely with sales. It is important to consider which existing customers are most likely to be the early adopters (obviously one will already be in place) and how these opportunities can be converted. Positive customer experiences with the product should be used to build credibility with other potential customers. The impact of social proof (Dr Robert Cialdini) can be a powerful sales tool.

With early adopters in place where will the growth (and volume) come from? Targets should be identified and prioritised and marketing activity focussed to help. A plan should also be put in place to support any sales intermediaries. Our own experience shows it is unwise to leak or drip feed new product information to far in advance as it often causes confusion and a lack of control.

Plan The New Product Launch

There is only really one opportunity to launch the new product so it is important to get it right. Everyone must have agreed and signed up to the plan, appropriate content should be in place and online and offline promotional channels should be set up and ready to go. In B2B markets there are often exhibition and seminar opportunities and these should be ready to be exploited for maximum impact.

Plan Product Sales Growth In Other Market Segments

Given the reality of limited sales and marketing resources in many small and medium sized manufacturing businesses it will not be practical to attack all identified market segments at one time. New (and potentially lucrative) market segments could appear in time leading to a re-assessment of the priorities but it is important to have an plan in place  as a reference point to refer back to if priorities do change.

Conclusion

The New Product Development Process can never be risk free and it is perfectly valid to try and mitigate some of that risk by finding a lead customer before making a commitment. However, it is important to be aware of the risks of this approach and to take appropriate steps to deal with those risks.

A plan is of vital importance to address each market segment, to seek out the early adopters and to plan growth. Although there can often be some internal company conflicts and politics it is vital that sales and marketing co-operate and both genuinely sign off on the plan and commit to the way forward.

About admin

Phil Smith is a experienced B2B marketer who writes about a number of subjects including business growth, technology marketing, B2B marketing, marketing strategy and business development in niche markets. Based in Northumberland, England and also covering Tyne and Wear and Durham Phil has owned and run Striga Consulting since 2008.Contact Phil at phil@striga.co.uk or call 01670513378