Maybe your business has been growing for years, and you want to grow it even faster with a new product or service. Or perhaps you’ve stalled in sales, and are concerned. You’ve dreamed up a new product or service, and hope that releasing it will get your revenue engine humming again. But before you send out an announcement and clink your champagne flutes, we recommend pumping the brakes. There are some important steps to take when launching something new that are often forgotten or skipped due to self-imposed pressure or timelines. We encourage you to take a long, deep breath and read on before taking it a single step further.
Conduct real market research.
Most business owners will glance at this and move on, thinking they’ve already checked this box. Of course, you feel like you know your market, and of course, you’ve done some homegrown research to see if your product idea has legs. But nine times out of 10, this type of casual research just isn’t enough. Before investing any capital into a design, a prototype or even strategic planning, real market research must be conducted.
- Primary market research – This refers to going directly to customers or prospects in your target market and asking their feedback about the viability of your new idea. This can be done through in-person interviews, digital surveys, holding focus groups, etc.
- Secondary market research – This is research from a third-party. You can find a lot of it online, on publications’ websites, government sites, in trade journals or on trade associations’ websites – and so on. A lot of this is free, but you may also want to pay for very specific market research from analyst firms, research agencies and individuals. Just be sure you’re using credible, up-to-date sources for this information.
- Competitive research – This will likely surface in your primary and secondary research efforts, but it’s important to canvass the market for products and services with which your new offering will compete. If your new product is a commodity or your new service is a dime-a-dozen, you’ll need to really evaluate whether you have enough of a differentiator to set you apart. You might! But you need to know this going in, and have your eyes wide open to the competitive landscape beforehand so you don’t get swallowed up.
Look at realistic costs.
A lot of business owners are visionaries and idea people and like to leave the finances to those who enjoy spreadsheets and crunching numbers. We feel you! Math isn’t our favorite subject either, and it can be a major buzzkill to see the cold, hard numbers of launch expenses staring you angrily in the face. But you need to welcome that uncomfortable stare-down, and give back a snarl of your own.
Make sure you work with someone you trust, who understands finances, to lay out all the likely costs of creating, marketing and selling your new idea. Here are some categories you’ll need:
- Development – This includes all of your company time being spent planning the new product or service, market research, design work, etc.
- Production & Technology – Do you need new equipment to manufacture your product? What will you need in terms of packaging? Do you have e-commerce capabilities on your site that will be sufficient? How will you handle shipping?
- Marketing & PR – You’ll need to get the word out about your new offerings, of course, so how will you do that? Get tactical here and include estimates for every marketing and PR initiative you’d like to use.
- Personnel – Depending on the product, you might need to train your customers on how to use it, which may require additional customer support staff. You’ll also increase your manufacturing demand, so need to account for additional employees (and possibly sales staff, as well).
All of these areas should be factored into a budget for the new offering, so you can realistically determine whether you have the funds to make this happen.
Also, pro tip: Don’t make the mistake of thinking you get to skirt around these costs if you’re launching a new service instead of a product. Yes, you won’t have expenses for materials, manufacturing equipment or packaging for a physical product, but there are often a lot of ancillary costs with services. For example, you may need new tools yourself to do the work, or you might need a new software program in order to offer your new service virtually. So keep in mind all of these potential supporting costs, as well.
After this, you’ll need to dial into your strategy. But we’ll save that for another day. In the meantime, if you need help preparing for the launch of a new product or service, we’re here for you! Give us a call.