As a new product executive, are you ever frustrated with some of the new product ideas your teams uncover? If so, the solution to your problem is to make sure your new product teams understand the following 4 ways your new products can delight buyers. Or put another way the 4 kinds of problems that customers will pay to solve.
The goal of any business is to make more money – now and in the future. So all of these problems are related to making more money. Consumer products are a different challenge which we will touch on in the fourth.
#1 Enable Them to Produce & Sell More
Look for problems that customers in your market are having that prevent them from producing and selling more. If your customer cannot produce enough to meet demand, is there some way you can help them produce more? It doesn’t have to be true for their entire business – maybe only one SKU or production line.
Similarly, don’t underestimate the value of helping them innovate as far as their product line. If they are struggling to enter new markets or solve new problems for their customers, is there anything your technology could do to help them be more successful? Gorilla glass commanded a huge margin advantage over traditional screen glass by enabling larger screen sizes without the risk of breakage.
On the flip side, are they having problems selling more of what they do have the capacity to produce? Companies buy CRM systems because they believe they will increase sales.
#2 Free-Up Investment
It’s a real problem for businesses to have working capital tied up in inventory. Is there anything you can do to help them reduce inventory in either raw materials, work in process, or finished goods? The value here is an immediate bump in cash flow. Something any CFO can get behind. And once they have your solution they will be hesitant to change as that will require investing more in working capital.
The other side of the problem is capital investment. When companies are running out of capacity they will usually consider adding new production lines. That can take years and many millions of dollars. Instead, what if your new product could enable them to delay investment by producing more with the bottleneck in their existing process? Of course, if it helps somewhere other than the bottleneck it isn’t solving a problem.
#3 Reduce Operating Costs
How can you help customers reduce their out-of-pocket costs? You have to be careful with this one. Far too many times, I’ve heard the argument about needing a lower-priced product to compete. That may be necessary at times but it’s not what delights customers. Instead, we are talking about productivity and effectiveness. What if you had a packaging solution that reduced shipping damage in an industry that suffers from high breakage rates? What if you could offer a raw material that has all the properties of the incumbent but can be processed in half the time? Or what if your automation solution would allow them to use lower-cost, less skilled workers? That used to be a wage issue, now it might be an issue of even being able to find people.
#4 Free Up Their Time
Not having enough time to get everything done is an almost universal problem. After all, there will ever only be 24 hours in a day. Consumers will pay for convenience even if they have to give up performance. P&G’s Swiffer mop is a great example. It doesn’t clean nearly as well as a mop and bucket, but you are done in minutes not hours. That created a billion-dollar market in only a few years.
But be careful with this one. Consumers will pay for convenience even though the time saved may only go to more time binging Netflix. In B2B markets, time saved is only valuable if it translates to more sales or lower out-of-pocket expenses as above.
Free Resource to Support Your Efforts
If you want to ensure the most revenue and value from your new product pipeline, grab a copy of my New Pipeline Accelerator Blueprint. A 12-point checklist to help you evaluate how well you are doing and where you should focus improvements:
- Uncovering Great Opportunities
- Choosing Winners
- Focusing Your Execution
- Visualizing Your Results