Thirty thousand new products launch every year. Most of them fail. And according to Harvard Business School professor Clayton Christensen, it’s because companies fail to understand how their product fits in the market. I’ve worked on dozens of product launch strategies, including some of the most successful in the location-based entertainment industry.
I’ve been watching SpaceX launches for years now. I love how they test, fail, and iterate during development to minimize the risks of an actual launch failure. Your product launch is mission critical to your business. Many companies never recover from a failed product launch. The time, energy, and money invested in a new product can derail your business trajectory if you don’t generate a return on those investments.
I’ve worked with dozens of VR startups and launched hundreds of products over my 35-year career. Here are the top reasons I see products fail in the location-based entertainment market and how to avoid them.
1. Know what problem your product is solving
People buy products that solve problems. For example, even entertainment solves the problem of boredom. Or in some cases, it provides needed distraction from our everyday lives.
For example, is your product a painkiller or a vitamin? If you can position your product as a painkiller, people are more likely to buy it. If it just makes your life better, then you have to work harder to sell it.
The more you understand the problem your product solves, the better you can define your feature set. And that makes your product launch strategy more successful. But to do that you need to know your customer.
2. Know your customer
If you don’t know your customer, how can you possibly know what problems they have and how to solve them? Knowing your customer is the most important thing most companies miss. One way I measure this is to look at a company’s marketing materials. How many times do they use first-person pronouns (I, we, us) vs. second-person (you, yours) or third-person (them, they)? If your marketing language is about you, your product launch is not tuned into the needs of your customers.
The best tool to get in tune with your customers’ problems is an Empathy Map. (Here is a short video on how to use one). It helps put you in the shoes of your customer so you can start to shift your perspective from you to them.
Most companies generalize too much when they’re looking at customer problems. They’re way too broad in their market approach. They don’t understand market segments, and how to break a market down into it’s smallest components.
Each market segment will have different problems. Knowing the problems of each type of customer in a market is the key to unlocking value, and nailing your product-market fit.
3. Nail Your Product / Market Fit
If I had to identify one thing (it’s NEVER one thing, btw) that a company could do to increase their chances of a successful product launch strategy, it is going narrow. Companies tend to be so excited about their products and solutions, they want everyone to have it. And that’s understandable – if you’re not excited about what you’re doing, why bother?
But if you take your product launch to a broad market, you probably aren’t going to relate with the customer at an intimate level. This means your language won’t resonate with them. You will struggle to identify how you’re solving their unique problems. Everything you do will look general, or worse, generic.
My Strategic Guide to Buying VR Attractions goes into some of the market segments for both operators and solution providers. If you’re an operator, understanding the mindset of your customer is critical to selecting the right product, and how you might launch it. (You ARE launching these new products you buy, right?)
If you’re selling a solution, is it best suited for bowling centers, trampoline parks, or karting centers? If you don’t know the answer to that basic question, and why?, you are not ready to launch.
Get clear on your target market, and go narrow. There are riches in the niches.
4. Know your competition
Once you know your market niche, you can really narrow down and identify your competition.
I cannot tell you how many times my clients don’t know who their competition is. Sometimes I get the “we don’t have competition. Those product launches are doomed to fail.
Or they might know only one or two but don’t realize there are more. Which means they don’t understand how crowded the market might be.
Have you “shopped” your competition, talked to their customers, and used their products? If you have not immersed yourself in the competitive marketplace, you will never be successful.
I recently considered buying a pizza shop in a small surf town in New South Wales, Australia.
I sat outside the restaurant for hours watching customers come and go to profile them. Every bar in town became an opportunity to chat with the bartenders about the pizza shop’s reputation. Every other pizza shop in town was a target to sample their products, observe and interview customers, and even talk to the owners about their businesses. I even spent a week at the backpacker’s hostel where I learned about the history of the town, the owner of the pizza shop for sale, and the history of the business.
In a week I knew more about the pizza business in that small town than most entrepreneurs I meet know about their markets after a year of product development.
And no, I didn’t buy the pizza shop. At least not yet.
5. Understand the Distribution Landscape
Seeing how your competition is getting their products into the market can give you a clue into the distribution landscape. But every distribution channel has nuance and quirks to it. Failing to understand these will lead to a failed product launch strategy.
The internet has collapsed entire distribution channels, disintermediated many distributors, and created entirely new ones.
There are often unwritten, and sometimes unspoken rules about distributing products in certain markets. In the amusement industry, it was once forbidden for a manufacturer to even talk about a price for a game. It was up to the distributors to set the retail price so they could maximize their margin.
And just because you find a distributor, doesn’t mean your product will successfully penetrate the market. Working with distributors to keep them motivated and focused on your product can be a full-time job. Too many companies abdicate the sales role to a distributor and under-invest in things like account management, marketing, sales teams, and lead generation.
6. Have a Product Launch Marketing Strategy and Plan
Rarely have I encountered an entrepreneurial startup that had a well-rounded pre-launch strategy and plan for its product. A product launch is one of the most exciting times in a company. It’s like giving birth! I like to treat it with similar reverence and excitement.
Don’t just plan to show up at an industry trade show and think people are going to line up to buy your product. Even if you do everything listed above, you still need to capture the attention of your customers. Today attention is the most valuable currency we have. Companies like Google and Facebook have built billion-dollar businesses monetizing our attention.
Successful product launches create so much excitement that they rise above the noise of even the most crowded markets. This is where creativity can be a powerful differentiator. How can you stand out in your niche market in a way that really resonates with your target audience?
Make sure your plan leverages public relations, social media, industry events, distribution channels, thought leadership, giveaways, promotions, and online and offline media. And be willing to get a little crazy. Use creative brainstorming to come up with ideas.
7. Leverage Industry Influencers
One way to gain visibility and credibility when entering a new market with a new product is to use industry influencers. Who are the people that your customers listen to? (Another reason to know your customer – see #2)
Look in the distribution channels, media, trade associations, and buying groups. Is there an influential customer that others follow? How can you get them to talk about your product?
Maybe there’s a thought leader in the space that aligns with your brand and product message? 77% of marketers say their prospective customers rely on advice from industry experts.
Make sure the alignment is authentic, or your audience will sniff it out and smell bullshit. The 2020 B2B Influencer Marketing Research Report shows that the most essential qualities in choosing an influencer are
- Relevance of Audience
- Subject Matter Expertise
- Publishing Platforms
- Values Alignment
If you use these 7 tips in your product launch marketing plan, you will increase your odds of success dramatically. And your sales team will love you too.
If you are going to be launching a product in the next year and want to chat about how I might be able to help, just drop me a message. I’m developing a new influencer marketing and lead generation program and would love to tell you more about it.