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It’s a story that has played out time and time again. A company announces a new product. It is innovative, well positioned and competitively superior. Senior management has high expectations for the new product and has established big revenue targets. Unfortunately, winning market share with a new product is hard.
In fact, according to a Forbes Magazine article, evidence suggests that close to 80% of all products launched into the market will fail. Yet companies still invest a lot of money and personnel resources bringing new products to market with the hope that this time things will be different. Think about the last three significant products your company launched? Can you unequivocally say the product launch met or exceeded your expectations? If so, based upon what criteria? Most marketing teams have specific market share and revenue targets for their products and they rely on, and often expect the sales team to exceed those targets. Yet, according to a study published in Harvard Business Review, only 3% of new products will achieve their revenue targets.
There are lots of reasons new products don’t make it. The product design could be poor, the marketing campaign could be weak, the timing could be off, or economic conditions could be unfavorable. Companies work hard to mitigate these risks by spending millions in R&D, customer surveys and marketing research. And yet even when millions are spent to make sure that the new product is the right product at the right time and place, companies simply make the assumption that a key element of success – selling the product – will simply take care of itself.
When most new products are launched to a sales force, there is a similar pattern that seems to be followed. New product training and marketing collateral are provided to the sales team, frequently in a large meeting setting with the appropriate fanfare. The meeting, including the training and collateral, is focused almost exclusively on product details, explaining how the product is different and better. Marketing teams work hard to prepare their presentations so that it generates excitement and gets the sales force motivated to take the new product into their territories. Marketing often makes the dangerous assumption that the sales team will know what to do with the information they have provided and that the sales reps are as excited about the new product as marketing is. In reality, this is a dangerous and often ‘product launch killing’ assumption. In many cases, sales reps may see the new product as a burden. Salespeople will have to invest time to learn the new product, they will be forced to sell to influencers they don’t have relationships with, and time will be taken away from selling the products they are successfully selling today.
Some companies have broken the code and have found ways to integrate marketing and sales functions. Not only do they provide their sales force with the basic information about the new product – they provide their sales force with a strategic and tactical roadmap explaining how to successfully sell it. In these situations, a sales force leaves the meeting with full command of key information such as: the industry trends driving the need for the product, what an ideal target prospect looks like, how key influencers will evaluate the product, how to create the need for the new product and how the new product compares to the competition. Without a roadmap to help sell the new product, salespeople are left to find their own way. The steepness of the learning curve and the time it takes for a salesperson to get it right can mean the difference between success and failure. In today’s world, a competitive edge doesn’t last long, and a new product has precious little time to gain traction. Every day counts.
We have discovered that marketing makes five critical assumptions about a sales force’s ability to win market share and grow revenues with a new product. The five assumptions are that salespeople:
- Understand the market shifts and how they impact the new product
- Know which prospects to target first
- Can identify the key influencers involved in purchasing the new product
- Know what decision criteria customers will use when making a decision to buy the new product
- Know the common objections they will face when selling the new product and how to effectively handle them
When Marketing avoids making these assumptions, and instead develops the sale forces knowledge and skills in these areas, chances of winning market share and growing revenues quickly with a new product increase dramatically.
To learn more about our research go to: https://igniteselling.com/white-paper-five-assumptions-cause/
Today, companies are launching more new products than ever. Most of these new products are targeted to produce significant revenue and some are “bet the company” entries to the market. Take a medical device new product launch for example. A product may take up to 10 years and an estimated $300-$500 million just to make it to market. This includes countless hours in R&D, clinical trials, human trials, and FDA approval. Yet time and again, the effort devoted to launching the new product to the sales force is often not commensurate with the substantial investment and the revenue expectations.
Winning market share with new products requires a new way of launching products to a sales force. It means avoiding the assumption that if a salesperson can sell one product, they can easily sell something else. Once a salesperson knows how to sell the product and who to sell the product to, the return can be great. If marketing doesn’t give a salesperson the insights they need to sell a new product, a great salesperson will figure it out – eventually. But if there’s a need to get a new product moving fast, eventually won’t be soon enough. Success requires doing something different. A good first step is to stop assuming your salespeople know what to do when a new product is launched and instead give them a roadmap for success.
This article is written by Steve Gielda and first appeared on LinkedIn.