What to do Before Launching a New Product or Service
If I asked you, a senior service leader, if you talk to customers and prospects, you would no doubt answer with a loud and resounding “yes!”
Then, if I asked why you talk to them, you’d probably give me one or more of these answers:
- They called me with a problem.
- I was following up on a service visit.
- We’re rolling out a new service, and I have a good relationship with some customers.
- They wanted something, and I am the only person who can say yes.
While these are all good reasons to talk with customers and prospects, this list does not include even more important reasons to talk with customers:
- Planning a price change.
- Reorganizing the organization.
- Promoting a service engineer.
But what’s the most important reason to speak with your customers?
To better launch a new product or service.
In that scenario, collecting customer input isn’t just nice – it’s a business necessity.
Launching A New Product or Service
During a recent Technology Services Industry Association webinar, the presenter included this graphic showing the three significant steps to creating and growing service revenue.
Notice that the first step, the foundation of all service revenue generation, is to “get service offers right.” No matter how well you know your customers, they are the only people who will pay for your services, so you better get your approach right. The only way to determine if your approach will resonate with them is to talk with them directly.
The same logic works for new products and even new businesses. Fundera recently reported that “20% of small businesses fail in their first year, 30% of small businesses fail in their second year, and 50% of small businesses fail after five years in business.”
Asking the customer for their input is a key step before making a significant business decision, as the future change will directly affect them—and, therefore, the future of your business.
A Real-world Example of the Importance of Customer Input
In my company, we are frequently hired to help capital equipment manufacturers create new or updated service offerings to increase their service revenue and profit. As part of our service offering development process, we always survey some customers in each market segment that may require different services. In addition to discovering useful information, the survey gives us a more detailed perspective of what customers want in their service choices and how much they are willing to pay. This step before launching a new product or service minimizes the likelihood of failure.
This approach minimizes the client’s risk of launching a product without a strong market need, reducing the likelihood it might fail when introduced. It also ensures they only invest in training, marketing, and sales efforts on services customers indicate they would have a high likelihood of purchasing – at a price they’re willing to pay.
This strategy also applies to the launch of new or upgraded products.
Let’s think about an example. Assume you manufacture specialty cutting tools and want to make your new model stand out from the competition at upcoming trade shows and on the factory floor. Your branding expert suggests that you paint the new model an attention-grabbing color like International Orange, similar to the Golden Gate Bridge.
After deciding to move forward with the bold color choice, you hold a training session to update your sales team on the new model – but they all dislike the color and warn that clients might feel similarly. Undeterred, you push forward with the launch of the brightly colored new product. One week later, there are ten new orders for the product…but there’s a catch. Each new client will only pay for the product if it can be made in an industrial gray to match the rest of your product line.
Because of this requirement, you now have to update the website and all product materials to replace the old color with the new gray one, the engineering team needs to redesign the new parts to reflect the new color, and purchasing needs to tell their suppliers about the future adjustments to accommodate the new color.
All because no one checked with potential buyers!
To maximize your chances of offering services and products that will actually sell, you must ensure that future buyers want what you are selling.
In 1998, Tony Alessandra and Michael J. O’Conner wrote “The Platinum Rule: Discover the Four Basic Business Personalities and How They Can Lead You to Success.” In the book, they proposed the Platinum Rule: “Do unto others as “they’d” like done unto them.” This article was based on the following of the Platinum Rule.
Click here for an overview of the 7 Reasons New Services Fail, including not offering what customers want to buy.
About Middlesex Consulting
Middlesex Consulting is an experienced team of professionals with the primary goal of helping capital equipment companies create more value for their clients and stakeholders. We continue to provide superior solutions to meet the needs of our clients by focusing on our strengths in Services, Manufacturing, Customer Experience, and Engineering. If you want to learn more about how we can help your organization perform the most critical step before launching a new product or service, don’t hesitate to get in touch with us or check out some of our free articles and white papers here.
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