Too many product launches are unsuccessful

By David Ronald

About 95% of new products launched every year fail, according to Professor Clayton Christensen at Harvard Business School. 

This is an astounding statistic.

What does failure look like? Well, in simple terms, it means that the revenues attained from a new product failed to have any positive impact on a company’s income.

The number one reason why products fail, according to the Harvard Business Review is that companies become too engrossed in product development. Consequently, they don't adequately prepare to go to market.

Let’s look a little deeper. 

Here are five types of failed launches and the reasons behind them:

• Product in "sales limbo"—the product lacked a compelling value proposition and failed to sway buyers.
  
• Product is revolutionary, but there’s no market for it—insufficient attention was paid to ensuring product-market fit.
• Product defines a new category—there was a lack of planning and execution around buyer education.
• Product falls short of claims and gets bashed—the product was over-hyped and the marketing claims could not be substantiated.
• Company can’t support fast growth—there was inadequate forecasting of intense customer demand.

I’m willing to bet that you’ve experienced at least one of these in your career. They’ve happened multiple times in the past and will, undoubtedly, occur many times in the future.

In this post we'll look at ways to increase the probability of a successful product launch and examine metrics that can be can use to improve product launch planning.

Planning is Priceless

There are around 300,000 product launches every year, according to Harvard Business School.

Unfortunately, it’s all too common for businesses to sleepwalk through product launches. There are two major reasons why: 

• In some instances the product marketing team has too little advance notice about a product release and simply does what it can to launch the product on time.
• In other instances the marketing team is too overwhelmed with multiple other activities to agree to more than a few checklist items.

A successful product launch requires planning in coordination with multiple stakeholders. The launch plan should describe the goals of the launch and list key activities, owners, and deadlines.  

The launch plan should also provide key performance indicators. One obvious benefit of including metrics is that they can be used to evaluate the efficacy of the launch—another, more significant benefit, is that they may identify opportunities for improvement when the need launch rolls around.

Obviously a product launch has a start date, but it should have an end date also. Why does this matter? It's crucial to have an end date because the efficacy of the process can only be measured once the launch has concluded.  

The Customer Journey

One of the primary goals of a product launch is to take a prospect on a journey that ends with them becoming a customer. Ideally, however, a launch goes further and converts that customer into a raving fan who brings additional business through word-of-mouth referrals. 

We’re all familiar with the concept of the buyer journey, especially since we’ve all been buyers at one stage or another.  

From a company’s perspective, the mirror image of the buyer’s journey looks like this:

• Unknown—a prospect is unknown to the vendor.
• Known—a prospect becomes known to the vendor, perhaps as a result of visiting the company’s website and providing their name and email address in exchange for a lead magnet such as an eBook.
• Engaged—a prospect signals a greater degree of interest in the vendor’s product or service by, say, signing up for a webinar or a free trial, or even better, a demo.
• Converted—the prospect becomes a customer by exchanging money for vendor’s product or service.

Key Product Launch Metrics

At this stage it’s worth highlighting that not every product release is significant one—many software companies have a goal of releasing new functionality monthly, even weekly.

In these instances, the associated marketing launch may only require an updated webpage, a refreshed marketing collateral, an email to customers, and a webinar.

Be proactive in defining launch tiers and ensure everyone at your company is aligned around the difference.

So, with that out of the way, here are five metrics to track during a major product launch:

1. Awareness

• Downloads / Invitation Signups—a lead magnet on your website (such as an eBook) can be used as an early signal of interest in your product. You can also consider using an invitation to preview the upcoming product during the pre-launch phase as early indicator of awareness.
• Website Traffic—measure traffic to your website throughout the launch timeframe to learn which specific launch activities “move the needle”.
• Promotional Channel Metrics—look at promotional channels metrics, such as click-through-rate in your advertising, email, and social campaigns, to gain an idea of the effectiveness of your positioning and messaging.
• News Coverage—news coverage can be an indicator of awareness but be mindful that this is a signal of the effectiveness of your public relations, not necessarily an increase in awareness of your potential buyers.

2. Engagement

• Free Trial Signups—a free trial is a great way to assess interest in your product and provide opportunities for prospects to discover value. It can also be the beginning of a nurture campaign that exposes prospects to more functionality in the product and offer opportunities for in-person engagement.
• Product Demos—a product trial that involves engaging with someone in your sales or sales team is a strong indicator of interest and intent.
• Community Involvement—tracking the participation in your community be prospects can be a good signal, if a strong and active community is a component of your go-to-market motion. 

3. Acquisition

• Conversion Rate—the ratio of leads that convert to customers is one of the most important metrics to track as it provides insight into the efficacy of the entire product marketing effort.
• Time to Close—the average time that it takes a deal to close can be a valuable metric to track, even if isn’t truly an indicator of the success of a product launch.
• Customer Acquisition Cost—the amount of money that it takes to acquire a typical customer is an important metric and indicates how challenging it is for your business to acquire new customers.

4. Retention

• Customer Usage—tracking customer usage over time, such as monthly active users, is a is a good signal of how much customers perceive value in your value. Some companies excel at acquiring new customers but do a less excellent job of keeping them coming back.

5. Referrals

• Net Promoter Score—determining evaluating how many customers are likely to recommend your product to others is a valuable metric for product markets to track. Although it doesn’t measure the efficacy of the launch itself it does signal the effectiveness of your product marketing overall.

Another great way to assess the efficacy of your product launch is with qualitative feedback that can be obtained through surveys, one-on-one interviews, and focus groups. This should be both internal and external:

• External feedback—collect feedback from customers and prospects to get reactions and constructive notes about the positioning, channels, and other launch elements
• Internal feedback—collect feedback from internal audiences, including sales reps, marketers, executives, and product managers.

You can use this feedback to identify opportunities for improvement. You can even consider using these opportunities as KPIs for your next launch.

Conclusion

Launching a product successfully can be challenging, as the high failure rates described earlier demonstrate.

By setting clear goals around launches, aligning your product, sales and marketing teams around these objectives, and ultimately measuring performance against these metrics will help increase the probability that your next product launch will be your best ever.

If you found this article helpful be sure to read my other posts on Five Steps To Creating a Marketing Plan for Your Business, Advice on Creating Your Unique Selling Proposition, and The Most Neglected Concept in Marketing.

Plus, keep an eye open for a future blog post on how to develop and execute a successful Go-To-Market Strategy.

Did we leave anything out? If so, leave us a comment.