Why most new products fail: the 7 deadly sins
Each year, millions of dollars are invested into new product development. Millions more are wasted on media to spruik new ideas that probably weren’t good enough to launch in the first place. The reality is, most new products fail.
The reason for this shameful waste? A near pathological reliance on average. It’s a reliance on average people who don’t like to deviate too far from their comfortable average, using an average research methodology and testing to an average.
And the reason why we cling to our normative scores is that they’re familiar and we are mostly risk-averse. But a careful look under the bonnet of the innovation process reveals seven deadly sins that can be overcome to increase the survival rate of innovations.
Average consumers create average products
The first sin is to think that average people are good at imagining a better future. As one of history’s most successful innovators, Henry Ford, put it: “If I had asked people what they wanted, they would have said faster horses”. He recognised that most people are cautious about new things and wait until the early adopters try something before they do. This basic diffusion of innovation curve originated in the 1920s. It explained behavior back in the day when families huddled around the wireless but it is insufficient to explain the diffusion of ideas in today’s highly-connected world.
Now we have so much choice that we turn to the people who we trust the most for advice on what to buy. Nielsen’s latest global survey shows that 92% of people trust recommendations from family and friends above all other forms of advertising. Further, the recommendations we seek out the most come from the ‘influentials’.
So if you only tackle one sin on your path to creating winning new products, it should be to use influential consumers in your NPD process.
Create an innovations process
The second deadliest sin is not having an NPD process in the first place! So start by establishing clear ‘gates’ that force you to meet clearly-defined goals along your NPD journey. Secondly, ensure a good mix of divergent and convergent thinking at different stages. Divergent thinking is important because creativity needs to be fostered to come up with multiple potential solutions. But the rigour of disciplined convergent thinking ensures that you will only progress the best ideas. A process that builds saying ‘no’ in to your NPD plan is crucial. As Freakonomics puts it: “Sometimes quitting is strategic, and sometimes it can be your best possible plan”.
Co-create with influential consumers
Reliance on focus groups is the third deadliest sin. Focus groups are a very blunt instrument for innovation. According to Forbes magazine, co-creation is now the most accepted model for innovation. Tear down the walls, mix with your respondents, empower them to own the problem and give them the space and tools to cross-pollinate and solve your problem. But if you can’t get access to truly influential consumers, don’t bother attempting co-creation: it doesn’t work very well with a room full of random laggards.
If content is king, then context is queen
The fourth deadliest sin is presenting your finished ideas on nice, shiny boards, and then expecting your influentials to co-create from them. If the idea looks perfectly formed, then there is nothing left for them to co-create. Sketches invite constructive criticism better than finished artwork. A3 paper is usually fine, and compared to stark hard boards, sends a message that says ‘open to suggestion’. And the context you frame your ideas in counts. A car ad framed in Vogue‘s website suggests that the car is for sophisticated, young ladies. That same ad in a sports betting site positions that car as being relevant to suburban housewives.
‘Above average’ is not a measure of success
Most C-level people eventually need to see numbers. Research companies are adept at testing the new idea against a ‘norm’ – this norm being the average of past ideas tested. Ideas tested in an average research methodology, using average respondents, recruited from those same ‘average’ research panels. So every new product gets a number that almost guarantees it is about average. This is sin number five. And we wonder why most new products fail.
Believe in numbers but also believe in comparing the influentials’ opinion with the masses. If the influentials love it but the ‘masses’ are only lukewarm, the new product should be seeded through influentials before a mass market launch. If both the influentials and masses ‘love it’, then seeding through influentials will amplify the rest of the media.
Online versus offline
The sixth deadliest sin is simple: don’t rely on the online world to guarantee your success. The internet has had a profound impact, speeding the world up by a factor of around 60 times. By way of contrast, the telegraph sped the world up by a factor of 6000. And to make the point, according to the godfathers of word-of-mouth marketing, KellerFay, 93% of branded conversations happen offline. Online is vital to a successful launch but it is part of a much larger sales driving system.
Seeding for success through word of mouth
The seventh deadly sin is the expectation that a mass market launch will work best. Research by the international advocacy and word-of-mouth industry body WOMMA reveals that word-of-mouth combined with other media “generates 25% increased impact”. The moral is clear: seed through influential consumers for success.
But sampling is not seeding. And seeding without influential consumers is just expensive sampling. Successful seeding requires specifically targeted influentials, an engaging activity and a clearly defined sticky message to share. It works best if you use professional advocacy and WOM agencies. SOUP, for example, helped Reckitt Benckiser’s Dettol No-Touch Handwash generate a 55% sales uplift.
So stop clinging to the lamppost and lead a sin-free innovations life. Focus on influence and reject average research.