Millions of dollars are spent developing and launching new products each year, but the reality is only 10 percent will succeed. While this has been the accepted norm and considered the “cost of doing business,” a new approach unveiled at Nielsen’s U.S. Consumer 360 conference improves the likelihood of new product success to 75 percent.
Based on tracking 600 product launches and testing 20,000 concepts, Nielsen outlined a 12-step process with specific recommendations on what companies should change before a new product launch in order to increase chances of success. The process identifies, measures and predicts success spanning five stages: Salience, Communication, Attraction, Point of Purchase, and Endurance.
Your product must offer true innovation; it must be something that people will actually want. What is its value? The first step is really evaluating if the product occupies a distinct niche.
When the consumer is at the shelves deciding what to buy, the product needs to be able to market itself. Make your labeling/packaging create a kind of “mission statement” which will have the consumer clear on what the product does.
People will not want to take too long to read your product’s label; therefore, you must create and convey a message that is short, sweet, and to the point.
Explain why your product will continue to be different. In a store where a consumer has multiple similar choices, the advantage needs to be as clear and enticing it can be.
Packaging, ads, and coupons can say virtually anything, but a consumer has to believe what they are reading and the product is worth their money. Where does your credibility come from? Do they trust your brand? Are consumers in your niche willing to trust a new brand?
After the consumer is exposed to, and even believes, your ad campaign and message, the product must deliver on its promises. Companies need to take the time to make sure their product will deliver results at least as well as the ads state.
Many companies can, and have, had a “one-hit-wonder” product, but in order to sustain the success of the product over a long period of time, companies need product loyalty. Even if the product delivers on its promises in the beginning, complacency will allow your competition to come back. Build loyalty to your product by continuing to stay ahead of the competition and you will find that a new household name will be very familiar to you.
The Bottom Line:
Companies need to understand that all 12 steps weigh equally on their chances at a successful launch. The age-old saying that you are only as good as your weakest link is true. Even one risky area of the launch process can seriously detract form the value of the product.
The biggest advantage of the system is gaining a more accurate estimate of the product’s chances of success so companies can set action standards, like choosing only to launch a product once it has achieved an overall probability of success higher than 65 percent.
For more insight, download the complimentary webinar: Innovation Revelation.