Product Launch Mistakes: Things You Need To Know - Part 1
The top 10 product launch mistakes
A new product launch - if done incorrectly, the marketing efforts may never have a chance to recover no matter how much money and effort are spent. Companies invest millions of dollars each year developing new products and trying to increase their revenues and profitability. Some of these are good product, and some aren't. Nonetheless, they all have one thing in common: without appropriate marketing activities they will most likely fail. In fact, there are many examples of inferior products that have won in the marketplace simply because the marketing was more effective than that of the superior competitor.
Once a product is finished, the first step in successfully bringing a product to market is to execute a successful product launch. If done correctly, a product launch can provide early revenue momentum, a stronger competitive position in the marketplace and a foundation for all other future marketing activities to build upon. If done incorrectly, the marketing efforts may never have a chance to recover no matter how much money and effort are spent.
The key to an effective product launch is to create and execute a plan that is appropriate to meet your goals given your resource, budget and time constraints. This paper will summarize the top ten most common product launch mistakes that we have seen companies make during the past twenty years of launching high-tech products.
Mistake 1. Not planning early enough clients
Not planning early enough clients come to us all the time and tell us they need our help with launching products. Most of the time they are only a few weeks away from the product being ready, and they have realized that they either don't have a launch plan in place, don't have the expertise to plan and run a launch themselves or they don't have the resources to do the necessary work. We recommend that you build your launch plan four months prior to product availability.
Given our experience this gives you adequate time to plan for and execute extensive PR activities and marketing programs and get all of the positioning, messaging, collateral and pricing finalized. It also allows enough time to communicate to your partners (and internal groups if your company is large) so that they can prepare for and support your efforts. Product launches can be pulled off in a matter of weeks, but it is extremely stressful, leads to miscommunication and poor execution, and ultimately will usually result in less-than-optimal results and lower revenues.
Mistake 2. No sustaining marketing plan
One of the biggest product launch mistakes, particularly in high-tech, is that companies assume that the launch is an "event" unto itself, and that initial buzz generated combined with the excellence of the product will be enough to generate ongoing sales momentum. To further compound the problem, if the product is exciting and the company achieves a lot of initial press coverage and revenues, they will oftentimes be convinced that they have hit the magic formula and that all is well.
Unfortunately, what often happens is that after an initial spike in sales and excitement following the launch revenues quickly drop to a much lower level. The company is baffled, and can't understand what has happened. After all, they had clear indications that things were going well. Given that effective marketing programs take several weeks to plan and execute, the company is now in a bind. Once they come out of denial (if they do) and realize they need to act, it will take quite a bit of time to get adequate programs going, and in the meantime revenues will continue to miss expectations. Revenue growth can drop off significantly without a viable sustaining marketing plan & programs.
Mistake 3. Shipping a poor quality product
This is one of the deadliest product launch mistakes because it can sometimes be impossible to recover from. If the press gets hold of your product and it doesn't work as promised, or customers have a bad experience with it the product image and brand may be tarnished permanently. During the dot com boom there were literally thousands of examples of this - products that were announced and after customers tried them once they were never willing to try them again.
The best way to avoid this problem is to set quality goals early and gain consensus among all of the key stakeholders, including the executives involved. If you are a startup it is tempting to want to get first version of the product out. If you are a public company you may be under immense pressure to meet quarterly goals. And there is always the temptation to ship a product that isn't quite ready but that can be "fixed" with downloads from the Internet by the time it is in the hands of many customers (assuming they know about and act on getting the fix). Without concrete goals that are agreed upon up front, most likely your company will fall into this trap. Examples of goals like this might include:
- No fatal or crashing bugs can remain.
- Pre-set targets in your QA plan must be met (this forces you to have a QA plan, testing matrices and adequate resources to make it happen).
- Beta program targets must be met in terms of number of beta customers and usage. You might want to set a goal that 20 customers must have used the product successfully for 3 weeks with no major issues and at least 90% indicating they believe the product is ready to ship.
Mistake 4. Inadequate funding
It is very common for companies to believe that they have such a compelling product that for $5k-$10k they are going to be able to launch the next Hotmail, Skype or Google. This is particularly true with products that have a viral marketing component to them. The reality is that Skype's are few and far between. One way to avoid this mistake is to do an ROI (return on investment) analysis. To do this you first list all of the ways that you are going to reach customers (announcements, product reviews, marketing programs, viral word of mouth, online advertising such as Google AdWords, etc.).
From there you can make a rough estimate of how many impressions you will make on your target market, and how many you can expect to turn into leads. You then estimate what you think your close rate will be for those leads. Will 10% of them actually buy your product and pay you money? The last step is to then calculate the profit you will make based on the money you spend (ROI). This will help build a reality-based picture so that you can make more informed decisions about what an adequate spending level will really be. ROI calculation for a product launch.
Mistake 5. Overestimating results
Studies show that it takes an average of six exposures to your marketing message before there will be enough awareness to take action. This is one of the reasons that marketing after the product launch is so critical. If you can't reach your target with several exposures to your message you had better have a product that is so life-changing that potential customers can't resist finding out more and trying it. I'll give you a personal example here to make my point.
My wife and I were watching television one night and I saw an ad for a shredder being sold by Staples. The first time I saw it I thought "okay, another shredder, I don't need one". I saw the commercial two more times - luckily it was clever enough that I finally got what the differentiating point of their product was. It was heavy duty enough to shred credit cards and even CDs (which my shredder could not do). I then saw an ad in the local paper, and recognized that it was the same one and mentioned it to my wife. She told me "that would be great - right now I have to open all of those credit card offers and take out the fake credit cards in order to shred them".
Prior to this I had no idea we had this need, or that this product would solve it. As it turns out I went to Staples for something completely unrelated. In the store there was a big display of the shredders, being advertised for $39.99. My wife and I saw them and started talking about them. Mind you this was the fifth or sixth time I had been made aware of this product. It seemed very compelling, and we decided that we should investigate buying one.
Brian Lawley is the CEO and founder of the 280 Group (www.280group.com), and has shipped more than fifty successful products. He is the former President of the Silicon Valley Product Management Association, won the 2008 AIPMM award for Excellence in Thought Leadership for Product Management and is the author of the best-selling books, Expert Product Management and The Phenomenal Product Manager.