In the middle of product development at this moment? Thinking about how well the market will receive it? Worried the realistic sales forecast in your initial feasibility study won’t materialise? Given the dismal success rates of new products in the market, you are right to worry.
I have spent the better part of my career in product development, mostly B2B technological products. With no modesty at all, I am proud to say that the vast majority of the products I was responsible to launch achieved success in the market.
There were many factors that explained the higher success rates I achieved. The teams I was lucky enough to work with are definitely a major one. Another one is my obsession with talking to potential customers (external and internal) constantly to validate ideas, even before starting the feasibility study on the future product. I am also convinced that an important piece of market knowledge I happened upon, at the beginning of my product management career, and applied throughout the years, also played a very significant role in launching profitable products.
About 15 years ago, while working at a major telco, I had access to the results of three very large studies which, combined, covered all segments of Canadian businesses. The studies were conducted with the employees or owners (who held the purchasing decision power) of over 5000 businesses of all sizes, in all sectors. One of the objectives was to figure out what the folks who had purchasing responsibilities in Canadian businesses wanted most.
Each of these studies, conducted in a different size segment, came to somewhat different conclusions. When I put the dozens of answer trends (groupings of multiple answers with a similar pattern) of all three studies together however, I eventually picked up on three mega-trends. These mega-trends were the same across all business segments. They also seem to hold true across time. Most of the highly profitable business products in the market today still follow them.
These mega-trends became my acid test that every single product I ever created had to pass before I sent it out in the market. I also call them my 3 golden rules. These rules are not mutually exclusive. They can also be applied to B2C products which are purchased based on rational (vs. emotional) decisions.
So what are these three golden rules that will woo your B2B customers?
Efficiency, Simplicity and Control
Before I explain each of these rules, I want to point out that I define a product not only as being the product or service itself but also the entire purchasing, usage, maintenance and support experience that surround it. I refer to this package as the solution.
Efficiency refers to your customers being able to do the same amount of work with fewer resources, or more work with the same amount or fewer resources. In B2B, efficiency can be approximated by the total cost of ownership (TCO). As a provider, if you can show that your solution’s (not your product) TCO is lower than all of your competitors, you are almost assured of a sale.
Let’s face it; we are all swamped at work. Complicated or complex solutions require more of our time than simple ones. Not to mention, that some folks just don’t want or can’t extend the brain power to wrap their heads around complicated or complex solutions. Making things simple for everyone at your customers’ involved in your purchasing, usage, maintenance and support chain will become some of your most powerful sales arguments. These arguments won’t require any of your sales reps uttering even a single word.
This criterion can be straight forward but often is not. It can be an indirect effect of a solution characteristic. When designing your solution (again, not just your product), be mindful of giving more control to your buyer over the work he/she is paid to do. An example of this would be the power tool manufacturers who started offering leasing as an option to their customers. When contractors responsible for planning large projects were not sure how many tools they would need, or when they would need them, their only option was to buy them ‘’in case’’ or risk delaying the project if they didn’t buy them. Leasing, aside from lowering their costs, helped the contractors feel like they had more control over their planning.
Unlike giving control at the purchasing stage, extending control throughout usage, maintenance and support of your solution will not increase your initial sales. It will however increase your customer satisfaction rates and repeat purchasing rates greatly.
Here you have them, my three golden rules for product development that ensure new product success in the market.
All three rules do not have to be followed for a solution to be successful. The more of these three rules are followed by a solution, the higher the probability of success it will have in the market.
Sales of new products are not the only ones that will benefit from following these three rules. Fixing your existing solutions so they follow them will also yield better sales (new and/or repeat). Existing solutions that don’t follow the three golden rules usually don’t present problems at the product level. Most often it’s one or several processes which include a customer touch point that is flawed. It could be your invoicing, contract, provisioning, customer service or other process that is not following one of the three golden rules.
Put your own solutions to the test. See which ones follow any of my three golden rules. I bet you’ll also be pointing to your most successful products.