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When you are in business, it is important to keep track of the success of your products. Without keeping track of success, you are more likely to fall behind your competitors and miss out on opportunities to gain a larger market share.
Metrics and key performance indicators (KPIs) are often used by businesses that want to keep track of the performance of specific products and their contribution to revenue generation.
Defining product success
In some ways, success is very much defined by the person who is setting the standard. For example, what seems successful to one person or company may seem like a failure to another. It is important to define the parameters for what is considered successful so that you have something to use as your baseline. Defining success is a process. Here are the steps you can use to help define what success means to your company.
Assess new customer volume and where your product leads are coming from
Gaining new customers is important to any business. It is a good metric to determine how many new customers you are gaining per week and what that says about your company. Comparing new customer metrics over time can tell you if your lead acquisition is staying steady, slacking or improving.
Looking at where your leads are coming from is also important. This could be as simple as looking at where your customers are before they navigate to your website. Are you getting a steady flow from Facebook ads and Google Ads, or are most of your leads coming from affiliates or static ads on various websites?
Knowing where you are getting your leads from can help you allocate your advertising budget and get more new customers for your investment.
Conduct a brutally honest assessment of the product’s technical performance
Good quality control is critical to long-term product success and gaining new customers. If there has been a product recall in recent times, then it is important to see how this has affected sales figures and new lead generation.
It is important to evaluate response times to customer calls and the overall volume of customer complaints about products or services. Customers need very fast response times to any issues or they are quite likely to leave bad reviews or worse. Streamlining the process to address customer questions and complaints is a good idea for any business as it grows.
Evaluating the most common technical problems and brainstorming how to fix them will improve product quality and overall customer perception of your products and business. If you were forced to source some of your materials from alternative places during and after the COVID-19 pandemic, now is a good time to evaluate how this might have affected the quality of your products.
Look at the financials
Costs of production can go up and down over time. It is important to regularly determine how products are performing from a financial perspective. Is the revenue versus the output acceptable? Are there ways to increase profits and revenue without having a negative impact on product quality and customer satisfaction?
Temporary or seasonal changes in revenues are common and often expected. For example, a company that specializes in seasonal outdoor gear can expect larger profits in some quarters than others.
Economic and supply chain factors can lead to different numbers. The pandemic led to many companies being forced to limit production either from lack of labor or due to an inability to source the raw components they needed to produce their full line of products. Higher production costs due to sourcing materials from non-traditional suppliers were the reality that many businesses faced.
How popular is the product, and is it used often?
How often a product is used and the total number of customers are good measures of success. If you can compare this to your closest competitor’s number of customers, you can get an even better idea of where your company stands in terms of market share.
Is popularity likely to increase in the future due to social or economic factors? Trends come and go and there are sometimes fantastic profits to be made if you market your products well at the right time.
Are upgraded versions selling?
Many products and services have different versions and upgrades available to customers. A good example is computer operating systems. Microsoft Windows is available in versions such as Home, Professional and Student. Discounts on larger licensing volumes are available for those who need a lot of software for their school or business.
In the case of Microsoft, the company would look at how well each more expensive version is selling. For example, how often is the professional chosen over the home edition when sold to an individual? Knowing how well an upgrade is selling can allow for further questions – for example, is the price point for the upgrade too high for the customer to think that it is worth it for the extra features offered?
Upselling an upgrade can be tricky with some products, so if yours are not selling, then you may need to rethink your marketing strategy.
Assess marketing performance or ROI
Good marketing can make all the difference in the success of a product or service. That being said, a marketing plan that was successful at one point may stop performing so well later on. It is important to evaluate the success of marketing campaigns regularly so that you can make sure that your advertising budget and labor are being used as effectively as possible.
Having a great marketing team is important for the success of any company. If you work for a very small company, then it may be that your marketing is outsourced to a marketing agency. This does not mean that you do not need to be very involved with your marketing. Larger companies have full-time marketing professionals who work to promote products and services. Over time, your company may use a combination of marketing firms and in-house talent to produce campaigns.
General tips for product success
Know your demographics
The more you know about your target customer, the better. Knowing your customers’ details allows you to tailor products and marketing to them. This way, your products and services have the best chance of commercial success.
Data mining and analysis can help provide key information about potential customers and offer information that can be used to answer questions about the likelihood that a new product or service will succeed or fail.
Consider prototypes and testing before any major launches
Developing a prototype can be expensive, so it is important to do as much research as possible to determine the viability of a product before investing money into bringing it into production. This means that you need to use surveys and data analysis to see if your target demographics are likely to have a positive response. Taking the time to do your research can save a lot of time and money.
Extensively testing a product before any major launches can avoid disasters and allow you to make changes if flaws are found or if there is an indication that small improvements could drastically increase overall customer satisfaction and value perception.
Pay attention to your closest competitors
You can learn a lot by keeping up with what your competitors are doing. This means keeping track of the products and services they offer, price points, and the perks that their customers seem to value the most. Learning from their mistakes is also very valuable.
If it is clear that something is not working for them, then trying to understand why and what you might do differently can help a lot. A product or service may have a lot of potential, but if it is not presented well or has a few minor flaws, then this can be enough to make it unsuccessful in today’s competitive global marketplace.
Think outside the box
Brainstorming new product ideas is important for creating innovative products. You should encourage employees to be innovative and share any ideas they might have for products and services that would benefit your target demographic.
Regular meetings where everyone has a chance to offer insights and bring new ideas to the floor foster an environment that’s conducive to great innovation and product design. Consider what types of products are needed to meet the specific needs of your customers.
Plan your expansions and growth carefully
Regular, steady growth is a great goal to have. Growing fast may sound good on the outside, but the reality is that growing too fast can lead to problems for a company. With steady growth, you can more easily adapt your business plan and practices to accommodate the added customer base and revenue. When growth occurs too quickly, it can lead to loss of product quality or not being able to meet customer demands and orders fast enough.
Not being able to keep up with production can lead to a loss in future orders and a lack of confidence in your company. If explosive growth happens that is unexpected, then it is important to address any issues it causes as quickly as possible. During the pandemic, there were some companies that saw temporary, extreme rises in demand that eventually leveled out. Luckily, businesses realized that expanding too much would probably be a bad idea as demand would likely drop after the crisis was over.
Other businesses saw their brand explode and are still seeing high volumes of new customers. Those in the emergency preparedness sectors in particular have seen a much higher profit than usual and a lot of this has continued to come into the company coffers.
Investing a lot in a new manufacturing process is a good example of an expansion that needs to be carefully planned. Will your business be able to survive if profits are not what you expect? What is the projected revenue if a product is just moderately successful?
As you can see, there are a lot of questions and factors that have to be considered in planning company growth.
Creating your product innovation strategy
It is important to develop a product innovation strategy; however, while this can take some time, the process is well worth it. Becoming an innovator is easier when you have the right skills to lead your team. Spalding University offers an online Doctor of Education in Leadership degree that gives you the skills you need to take a business to the top. If you already hold a master’s degree, then you can earn your doctorate in just two years while keeping your current job. Students can learn how to make transformative change and be an advocate for change.
To get started on a product innovation strategy, consider taking it step by step using the following guide.
Be clear on your objectives
It can be very easy to get side-tracked when brainstorming what type of product you want to bring to the market. Defining your objectives from the start is the best way to handle things. It is important to ask what you want to bring to the market and how it will help your company’s goals and vision.
Now is the time to ask what level of success you would like to see for this product. Are you trying to satisfy a small niche of your customer base so that you can offer them a wider range of products, or are you fulfilling a major market need that you anticipate will bring in large revenues?
Do market research
It is important to know your market. Markets change over time, so make sure that you keep up with current trends. Regardless of how up to date you think your knowledge is, you need to conduct fresh research when creating a product innovation strategy. This can mean conducting your own surveys via email, your website or text message. Calling is not effective unless you have an established focus group that knows to expect a call from you occasionally.
Evaluate the overall value of the product
It is important to look at the value of a product overall. This means asking what it brings to your company. Does the product or service offer a different perspective on your image, or does it ring true to the typical impression that people have of your company?
This is the stage at which you list all the potential and likely benefits of following through with developing and releasing the product. This is when you really need to convince those at your company who are in charge of major decisions that your idea is going to yield real results.
Take a close look at your resources
Being honest and realistic about what resources are required to bring a product to market is essential to success. The last thing you want is to get halfway finished with bringing a product to market and then run out of budget or realize that you cannot get something that is essential for production.
If you are unsure of how to get access to a resource or you need to research anything else, now is the time to do so. Creating a realistic budget and making sure that you have what you need is one of the final steps in planning. Although it may have seemed as though everything was available at the beginning of planning, some things can be quite volatile. Therefore, you need to evaluate after it seems likely that your innovative product is something that shows promise based on your market research.
Finalize plans and start on the path to production
While this last step sounds like the end, it is really just the beginning. Actually getting everything together and starting the manufacturing process can take a long time.
Always take the time to make sure that your production processes and materials availability are good to go before making any major plans for delivering orders. Starting slower rather than rushing into manufacturing gives you more time to address any issues and ensure that you have a good product launch.
Marketing prior to delivery should be done with caution. You do not want to promise a product on a specific date and then not be able to deliver it in time. It is far better to promise a later delivery date and then put out a notice that your product is available earlier than to deliver late.
Defining success in product innovation
Creating new and innovative products may be challenging, but it is important that business leaders strive to invent products that make life better for the average person. The path to bringing a product to market can be long, but taking the time to do it right is important to the success of a company.
Photo by Daria Nepriakhina 🇺🇦 on Unsplash