It’s amazing really. The average company spends 3.6% of net sales (which can exceed 40% or more of their EBIT) on R&D, but only 50% are satisfied with what they get in return. For many industrial or B2B companies, the new product bottleneck occurs at market launch. When this happens, they spend significantly on new products and then fail to get the value they could with more effective marketing. Here are three key mistakes companies make and how you can avoid them.
1) Marketing features instead of benefits is especially common in technology driven companies. While recently evaluating a reasonably sophisticated company’s new product literature, I was shocked by what I found – or failed to find. I couldn’t find a single clearly stated benefit. There was a section called features and benefits, but it was loaded with materials of construction, UL rating information, and other design features. Unfortunately, they had buried the product’s single biggest benefit, which was that it offered the highest energy efficiency of any product in its class. With today’s energy prices and focus on the environment, that’s a huge benefit. It should have been the centerpiece of their marketing.
Sometimes this focus on features results when Engineering provides the benefit information and copywriters just clean it up. Your marketing copywriters must understand the difference between features and benefits and push engineering and product management to create a clear benefit statement. If you use internal copyrighting resources, it is critical that they do too. If your product has multiple benefits, identify the one that would drive customers to purchase your product even if the others weren’t included. That key benefit is where you should focus.
2) Failing to understand and prove the value their solution brings often goes back to the initial work done to find customers problems and unmet needs. With customers demanding shorter and shorter payback periods, innovators must be able to demonstrate how their solution helps customers sell more, frees up working capital, or reduces operating costs. One fatal shortcut at this stage is to skip quantifying the impact on the customer in detail. If you can’t quantify and demonstrate proven value along at least one of these three lines, it is difficult to develop rigorous case studies and your new product’s chances are slim.
Start every major new product development project with customer interviews to understand the problems you can solve and to get detailed cost information. Some find it hard to believe that customers will share this kind of information. They won’t if you’re there to sell them something. However, in my experience, they’ll share an amazing amount of information when you’re trying to determine if you can help them or to determine if the problem is financially worth solving for both parties. Skip this step at your own risk because resolving this after the fact is difficult and expensive.
3) Not differentiating the solution in a way that shows how it delivers superior results is another issue that again goes back to the upfront work. With the unmet need identified and the value determined, how does the new solution differ from competing solutions and products? What makes it unique? For a car-manufacturing example, that might be faster acceleration and higher fuel efficiency with patented Digitronic controls to optimize each cylinder’s burn. It’s patented (and trademarked) so no one else offers it, and by optimizing each cylinder, we get the big benefit everyone wants – faster acceleration together with higher fuel efficiency.
To differentiate your new products, identify the competitive alternatives to your solution and run clear side-by-side comparisons so that you can show how your solution differs. Also, consider how you can differentiate your product with trademarks and patents. The key is to help customers see how your solution is different and why it has advantages over competitive alternatives.
More Impact Bottom Line
To get more out of your new product launches:
1. Focus your marketing message on the key benefit that customers want.
2. Show customers how it will create value for them and back that up with case studies or testimonials.
3. Differentiate your solution with side-by-side comparisons showing your advantages.