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The anatomy of new product failures

| Apr 2, 2012 No Comments

After all the market assessments, business plans, alpha tests and beta tests, at least half of all new products still fail to achieve commercial success. Why do so many new products fail?

Sometimes the product design was fundamentally flawed. In others, the product concept was backed by poor market research. At times flaws in the product itself leads to failure. And in still others, it was just the timing was off. Yet, even when all these problems are addressed, and increasingly they are, failure remains the final result. One reason for the lack of success of new products is the failure to get the sales team to buy into the new product and teach them how to sell it.

Let’s explore the tale behind that story.

Sales people who have multiple products “in their bag” often tend to focus on some of products over others. There are many good reasons why this happens. Some products truly are a competitive advantage based on functionality, quality, customer support, or even price. As a result, sales people have a built in competitive advantage and success breeds success.

But listen to sales reps and you’ll hear some other reasons which begin to why some sales people shy away from selling new products: “I’m not going to be the first one to sell that new product. I don’t want to tarnish my relationships with customers. Let someone else be the guinea pig.” or “I know they say we should talk about the new software solution launching next month to seed it, but I’m afraid it’s just ‘vaporware’ and I’ll get burned.” or ” The new Model 40 is not only new, it’s different, I’m not sure how to sell it.”

Given the two extremes, where you know how to sell Product X and have had success and the “great” new Product Y for which you have no track record, what do you think sales people tend to do? And, if they haven’t been taught how to sell it, can you blame them? Can the sales compensation plan “encourage” sales people to sell more of the new product – maybe? But there’s one strong, underlying factor that “encourages” a sales person to sell a new product – they have had the training to help learn how to do it.

To learn to sell a new product most effectively it is better to use a learn than launch versus a launch than learn model.

The sales force should possess the required sales skills and knowledge the day the new product hits the street. This means a training investment should be made and training implemented before the product is launched. The more the new product is “different” than the existing product portfolio, the more important it is to complete the training before the launch.

Second, learning to sell a new product is a process not an event. A key part of that process is the early capture and analysis of what is working, and what isn’t. In some launches initial wins are achieved, but long-term revenue targets are never reached because of a false sense of success from the early wins. In these cases, the difficulty of moving beyond the early adopter is underestimated. In other cases, early successes never develop, a cloud of despair sets in, and the sales force goes back to selling what they are good at.

Given the number of new products most companies will introduce in the next five years, this is code worth cracking.

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©2012 Sales Horizons, LLC

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