Growth companies in many industries struggle to successfully launch new products and services–and thereafter to scale them into meaningful new revenue and profit drivers. As a result, company executives are always on the lookout for “best practices” and winning examples of how other businesses have accelerated market success.
While best practices may sometimes help, we’d like to draw your attention to a different perspective: the seven “worst practices,” or pitfalls, that cause seemingly great B2B and B2C products or services to fail in the marketplace. These seven deadly sins--drawn from the overall frameworks presented by colleague Geoffrey Moore in his book “Crossing the Chasm”--prevent companies from getting their new products and services across the chasm from the early market and into the mainstream market.
Think about it: When any truly new product or service–especially a disruptive one–is launched (iPad, smartphone, medical product, financial service), the marketplace self-organizes into different customer buying stages:
The reason that more than 85% of new offerings fail is that companies think they can speak to this marketplace with one voice instead of recognizing that early adopters have very different buying motivations than pragmatic or conservative buyers. Not only is their approach wrong, but the vocabulary they use is not aligned with the different buying motivations–and therefore has little or no impact on those potential buyers.
Here are seven different ways to avoid that outcome.
1. Target customer mix-up: If you’re ready to move beyond the early-market stage, don’t just ask your current customers what they want or need. Instead, gain insight from mainstream customers who have not yet adopted–since they are your target in the coming 12 to 24 months and beyond.
2. Compelling reason confusion: The catalyst for driving adoption by mainstream customers is to understand the target customer’s “compelling reason to buy.” Do not confuse that with “compelling reason to sell.” The latter is your problem, and the customer doesn’t care about that.
3. Whole product perfectionism: If you’re waiting until you have the perfect product before you launch into the main marketplace, surrender now. To successfully cross the chasm, you need to focus on initially delivering MVP (minimum viable whole product). That’s the least complex solution that fulfills target customers’ compelling reason to buy. Stop thinking about what else to add in, and consider subtracting features to simplify the trial and purchase process.
4. Overdoing sales training: Just because you are excited about your new product or service doesn’t mean everyone must be trained on it. If you truly have a new breakthrough product (i.e., a disruptive innovation), then experience tells us that less than 15% of your sales team will account for 80% or more of first-year sales–so don’t train everyone right away. Instead, double-down on training and incentives for a small “Tiger Team” of sales pros who have the right mix of consultative skills, motivation, and energy, and limit the rest to “awareness training” in that first year after launch. Avoids wasted training time and money.
5. Pricing misstep: The road is littered with businesses that thought cutting price by 15% to 20% would help them cross the chasm. Sadly, price elasticity is muted at this stage of the market. Yes, you need a reasonable price, but reducing it further will not likely cause unit sales growth–it will just damage margins. Instead, consider reducing adoption risk for these pragmatist buyers by offering a performance guarantee or an attractive low-risk financing package.
6. Weak messaging: For a message to be effective, it needs to be well articulated in 75 words or less–preferably way less. And be cautious of thinking in terms of “unique selling propositions.” Unique could imply weird or different. Instead, communicate a superior selling proposition. Many companies struggle with this, using a plethora of benefit-laden vocabulary that end in “ility” and “ivity” (agility, manageability, productivity, connectivity)–yet miss the mark in communicating how their products or services are truly superior to that of their competitors.
7. The vision thing: It’s great, even essential, to have a longer-term vision for your business. But don’t confuse that vision with today’s imperative–to identify and deploy a compelling solution for specific customer pain points. And aim for revenue growth rates of 30% to 40% in those customer segments. That’s the fuel that will propel you forward onto a scalable and profitable path in the years ahead.
Three Questions To Ask Yourself
- How many of these seven sins have you observed in your company in the past two to three years?
- What impact have these mistakes had on the market performance of your new products and services?
- What will it take to correct these mistakes going forward?