As many as 9 out of 10 new products fail. With that type of odds, you might be better off learning to play poker.
Here’s how to improve your odds when introducing new building products.
1. Make sure you are filling a need.
I see many companies introduce a new building product, simply because they can make it. They then rationalize why their customers will embrace it.
You should start by having one on one discussions with the people who buy and use your products. Don’t ask them what new products they would like, ask them what problems they are having or what they wish could be better.
You should do this on an ongoing basis. This should be a part of every sales call.
2. Put in the’ A’ team
If you were going to Las Vegas with your money, wouldn’t you want your best gambler to be in charge? Wouldn’t you want to improve the odds?
Too frequently, building material companies do not put the best person in charge of new building products. They leave the best person in charge of babysitting their largest sources of sales. This is an area of great importance but a lot less risk than new products.
It’s also easier to justify this person’s high salary based on their large sales volume than the initial smaller volume of a new product.
3. Be prepared to be undermined from the inside
If a new product succeeds, it makes others fearful of their position in the company. As the CEO and others pay more attention to the new product team, the people who used to be in the spotlight may be threatened and will frequently work to undermine the new product.
New products may cannibalize the sales of existing products, creating more internal fear. A new product is like an infant and just when it needs the most support, it faces a jealous older brother.
4. No committees
For a new building product to succeed, it frequently requires a new approach to the market. Many senior people will want to be part of any new products. They frequently don’t add any value.
They simply want to be in the know and be able to take credit if the product succeeds. They will also use their senior positions to kill any innovative approaches that they don’t agree with.
This is a great place for them to be. They have no risk or accountability if the product fails and they can take credit if it succeeds.
It’s hard to do but I am in favor of either putting the new product area in a different location or having them report directly to the CEO.
5. Be in it for the long haul
No matter how well researched and planned, new products will face unforeseen problems. Maybe the product needs to be modified. Or maybe the marketing campaign is off target.
It’s time to stop using cute phrases like fail fast to describe your support for new products. It’s time to go all in.
Since the product development cycle takes many months and generally years, new products become old news by the time they are released to sales. That leads to senior management wanting a return on their investment – yesterday.
Too many companies lose interest or lack the willingness to make additional investments to support new products. They expect them to be profitable too soon. They assume the best rather than take a realistic approach.
They launch under the mantra of “fail fast.” Then they cut their losses by either pulling back or look for the next bright shiny object. Either way, the new product is left without life support.
As senior building material leaders, you need to double down.
New products are hard work.
New products are risky.
New products are essential.
New products also demand investment. It’s why they receive a lot of attention. It’s why others think the resources should be spent on their accounts to grow sales.
There aren’t many building product companies to use for a new product role model. You will learn more from other industries such as consumer packaged goods, technology and electronics.