The lifeblood of most companies is new products. There’s only so long you can sell most old products to a targeted audience, and the best way to keep your current customers happy while simultaneously gaining new ones is regularly offering new products in which they are interested.
Of course, this is easier said than done. At the company I started in 2008, we try to launch approximately 4 major new products each year. Yes, we could offer more, and someday as we expand we will probably increase that number. But for now, four is a manageable amount for us due to the significant number of man-hours we invest in research and marketing.
Here’s a conundrum: the more new products you launch… the more “swings” you take per se… and so the better the odds that you’ll find the next big hit product that will carry your company to massive growth. But balancing that is the fact that each new product ideally should reflect your best thinking and therefore takes a lot of effort to launch. It’s like the “turtle and the hare”. Do you launch a ton of new products but they’re shoddy and rushed, or do you launch fewer new products but they’re high quality and completely thought through? Personally, we run our company to be the latter.
By the way, if you ever want to increase your stable of new product ideas, create a spot in your project management tool where employees can input their ideas and even provide a brief “pitch” as to why they believe the rollout of their concept would help the company grow. We did that at 4Patriots LLC a while back and we now have a list of approximately 100 new product ideas that seems to grow daily. We use Basecamp for project management software and it was easy to create a new project where all of our employees could add new product ideas.
Now, it’s going to be impossible to proceed with the development of many of those 100+ ideas, even over time, and our employees understand that. But just having them occasionally take a break from their normal tasks to spend some time focusing on the future of the company serves to grant them more “ownership” and results in an increased interest in doing whatever they can to help drive the company forward.
OK, so when you have 100 new product ideas, how do you decide which one is the right one to launch next? This is a huge decision, especially when you sell a limited number of products each year. In fact, this choice has the potential to dramatically affect whether your company enjoys a record-breaking year or muddles through a lackluster year.
There are a variety of factors that go into this selection process, including:
But if you had to narrow it down to one thing, it would be need versus want. There are tons of things I want, but a much more limited number of things I need. I will probably purchase only a small minority of the things I want this year, but I will most assuredly buy a vast majority of the things my family and I need. So, keep your focus on products that people need.
This is where strong marketing skills become so crucial. Some people may not realize they need the item you are selling, so you may have to convince them through a persuasive argument. I’ve seen way too many examples of people “falling in love” with the product itself without considering the marketing. Or, potential customers may comprehend they need this item, but don’t yet understand why your product is a better value than the one being sold by your competitor.
Here’s a practical tip from Brian Kurtz, a titan of direct response and a heck of a nice guy to boot: send your current customers a “Q test” to find out what products THEY want to buy. This is a clever and proven way to survey your customers, and according to Brian has a pretty high correlation in terms of products that perform well in the “Q test” also performing well when rolled out to the marketplace. See Brian’s blog on The Horizontal Vertical for more on the “Q test” methodology.
By concentrating on customers’ needs – and creating/implementing a badass marketing campaign – you will greatly enhance your chances for success. And that’s something everyone wants for their company.
Allen Baler is a leading entrepreneur and Harvard grad. Allen Baler is a Partner in 4Patriots LLC, based in Nashville.