Innovation is key to your success as a company. Capitalizing on new ideas is the only way capitalism… well, works. Then how is it that 96% of new products fail to return the investment? Well, unfortunately, good products rarely sell themselves anymore especially because targeted marketing and flashy deals are often the first thing to catch a shopper’s eye. Getting a new product appreciated by the masses is no easy task, so it is best to scrutinize your product from every perspective.
An invention can be a technological breakthrough, but if it doesn’t provide unique value–solve an annoying problem– for customers, it will never become popular. 85% of consumer purchases are the same 150 products over and over, so you need to create a compelling argument for your product’s necessity if you hope for it to make its way onto shopping lists.
Take the Segway, for instance. Aside from mall cops and dorky tourists, no one bought into this ‘revolutionary’ mode of transportation. Technically, it was an engineering breakthrough with gyroscopes and fluid-level sensors never before seen by the public. So why do people still giggle and point when they see one and where are the separate Segway lanes?
The problem is that the Segway didn’t actually solve any problem for customers. Segways could never replace cars, bikes were faster, and simply walking a couple city blocks was far more convenient. No matter how cool a product is, if your customers don’t find it useful, no one will buy it, and your beloved invention will just be the butt of a joke in a Kevin James movie.
Focusing on the marketing efforts is the best way to target customers and A/B test to find how different product function emphases affect buying behavior. Figuring out what exact differentiation your customers seek from your product is the best way to stake the position of your product in regards to competition.
Speaking of competition….
Going to school on your competition is an absolute must. While your #1 goal as an entrepreneur is to provide customers with a valuable product, your #1a goal is to remain a solvent business, which usually requires beating your competition at least some of the time. This includes finding out just how many sellers offer the same good (or a substitute of it), what differentiation they promote, and what price they set.
The first item may be difficult to gauge in the vast marketplaces of Amazon and eBay, but determining what position your invention’s brand can occupy is the breakthrough your product will need. A great example of determining product position was the much-loved, but often maligned Snuggie.
From a utility perspective, Snuggies serve the same purpose as sweaters; they keep you warm and keep your hands free. So how did Snuggies become such a cult hit? Whether bought ironically or not, Snuggies fit a very particular niche in its competitive landscape that consumers loved, and no one mimicked. But of course, the kicker was the price point. Snuggies did not want to be viewed as a technically innovative, organically sourced, gluten free blanket alternative. It was a kitschy gag at first glance that would interest people enough to get them dialing the phone. So that necessitated a lower price point to induce people to buy. Even though retailers weren’t rushing to make their own version of the Snuggie, since there were comparable products on the market, the company had a better idea of how to price the item in order to get supply moving.
But the initial price point is only the beginning of your competitive pricing strategy. Unless you are selling fuzzy ponchos through infomercials, you will constantly face pressure from competitive products to lower your price or increased demand to raise your price. Consumer sentiment and production supply continuously change, so it is necessary to monitor your price relative to your competition to ensure that your price maintains your brand value, while also optimizing your profit.
Finally, Start Small
Just because you think your product solves a consumer problem at a price unmatched by the competition does not mean that your product will be a smashing success. Confidence is a necessity for any retailer, though overconfidence can just as easily sink your sales. Nowadays, overconfidence often comes in the form of ambitious social media campaigns that ‘raise’ awareness but rarely concretely benefit you or your product. Giveaways do little to convince a shopper to become a repeat customer; it is more important to have 100 word-of-mouth marketers who truly care about your product than 100,000 Facebook fans who entered one sweepstakes.
The other important way to jump-start the conversation about your product is by working closely with media to develop a PR strategy. It doesn’t need to be a glowing 5 star review above the fold on the Sunday Times to make a difference. It’s important in this stage to take ROI heavily into account. Again, your goal should not be reaching people, but reaching the right people. That means plugging articles for your lumbar support pad in Road Kings Magazine to get truck drivers to love your helpful product.
Contributing Author: Jack Symington