Ah, the bliss of creating new products. Many small businesses live and die on their ability to make new products and services to delight their customers and meet unmet needs. Yet when we see other more established firms like Spanx and Roku lean on a single product, we can find ourselves asking “why do new products matter” anyway?
This is a big question, and by analyzing it, we can help you to understand fundamental elements of business strategy.
Complacency Will Destroy Your Business
Most successful companies you can think of have multiple products. Apple has iPhones, Macs, iPads, and more. Amazon sells web services in addition to being a massive online retailer. Nike sells tons of different kind of shoes. You get the idea.
There are a lot of reasons for this, including most notably:
- Multi-product companies can sell multiple products to the same people, increasing lifetime customer value.
- If one product fails, many other products can keep the company afloat.
But it’s critical to remember one thing here. Complacency kills companies. Focusing on a single product, at least at first, doesn’t.
The same article I list above cites Coca-Cola, Duracell, and Crocs as examples of companies that started out selling one product and later diversified, demonstrating that each company’s tight focus early on made it easier to diversify into other product lines later.
We’re going to talk about why launching new products is good in a moment, but this context is so important. Don’t launch products just to launch a bunch of products. Launch products as a strategic maneuver to grow a business at the right time. Or, as Ron Swanson says on Parks & Rec, “never half-ass two things, whole-ass one thing.”
7 Benefits of Launching New Products
At this point, it’s safe to say that launching products is not always appropriate. Yet it often is, and here are a few reasons why:
1. Your company will get noticed.
One of the hardest things to do online or in general is to draw attention to your business. When people come asking us for help, it’s usually “generate leads” or “help me close leads.” The actual act of launching a product can help you generate leads.
2. People will interact with your company.
When you release a new product (or service), you will naturally need to interact with customers more, or at least in novel ways. This gives you the chance to build trust, have meaningful conversations, and convince them to spread the word. All the while this happens, you’ll gain feedback on how to improve your service as well.
3. You may see an increase in revenue.
This almost goes without saying, but a successful product launch leads to increased revenue.
4. There is strong potential for good PR and increased influence.
With newfound attention comes a chance to make some waves. That increased influence can give all your marketing messages a boost. Not to mention, a new product launch makes for some great public relations opportunities.
5. Your company will identify new opportunities for expansion.
The act of launching a new product will force you to interact with customers and then find latent needs. If you’re an avid reader of this blog, you know that the discovery of new needs is what leads businesses to launch successful products or services in the first place!
6. With attention and successful delivery comes a reputation.
A successful product launch can help a company build a reputation that makes it easier to sell products in the future.
7. You will build new relationships.
Lastly, a benefit of product launches along the same line as previous points, you’ll meet a lot of new people in the process. That means more customers, more money, and potentially more well-connected contacts.
Creating New Products Helps You Create Better Products
GutCheck wrote an article positing that product development is valuable for far more reasons than what we’ve listed above. This point is, in fact, so nuanced that we’re dedicating a section to it.
Creating new products help you create better products. The reasons are myriad, but also easy to understand. The processes that must be followed to create new products forces your company to gain the institutional knowledge it needs to make better products in the future.
Think about it: product development is one of the best ways to perform market research. The act of prototyping, testing, and refining a product requires you to focus on customer experience, implement feedback, and hear their ideas. Throughout the process of product development, you’re creating a big backlog of data that you can return to at a later date.
Practice really does make perfect. Achieving the ideal product-market fit is not something you will get right on the first try. It comes from the journey.
You’re Forced to Answer Hard Questions About Why Your Business Exists
Product launches are flashy. They draw a lot of attention. Along with that attention, comes scrutiny and negative feedback.
On top of that, product launches are expensive. You might wind up with bills left unpaid if the product doesn’t take off the way you want it to. Woof.
This might sound like a bad thing, but it isn’t. One of the ugly lessons that every small business has to reckon with at some point is “why do we exist?”
Product launches add stakes. You have skin in the game. When you’re trying to sell something new, you have to communicate, explain, and sell. You are forced to come up with a clear value proposition that speaks to the needs of your market. After that, you must understand consumer behavior and decision-making well enough to get people to buy what you’re selling.
You Can Even Learn from a Failed Launch
Many people have the mistaken impression that a product launch needs to be successful to be helpful. This is not always true, and in fact, with small businesses, a failed product or service launch can be one of the best things that could happen.
Sound weird? I’ll explain with an anecdote of mine. In 2018, I launched a Kickstarter for a board game called Highways & Byways. It was a board game about taking long road trips. A lot of people liked it, but the Kickstarter campaign failed pretty hard. If you want more details, I wrote an autopsy report of the campaign here.
Long story short, I had a good game that didn’t appeal to any subset of board gamers. Nobody was passionately interested in the theme and the mechanics didn’t draw attention to themselves either. It didn’t help that the price tag was – I shudder as I write this – $49.
But here’s the beautiful thing: I learned a ton from that campaign. I then went on to launch a campaign that raised over $28,000 on a shoestring budget. In between those two board games, I launched a marketing agency and started helping a diverse array of people succeed – from shipping companies to authors.
All of this happened because of the experience of getting my butt kicked on Kickstarter.
Common Reasons Product Launches Fail
With this in mind, nobody sets out to fail. So let’s take a moment to talk about reasons why product launches tank.
If your marketing research is sloppy, you will end up making a product that no one wants. This is probably the most common reason for products to fail – bad research resulting in a product with poor product-market fit.
Similarly, if your product is confusing, that’s a recipe for failure. To a lesser extent, a bad pricing strategy can also sign your product’s death certificate.
The beautiful thing about a failed product launch is that people will give you bad reviews. Those bad reviews will point you in the right direction, giving you specific and actionable feedback that you can use to diagnose your failure so that you avoid making the same mistakes in the future.
Final Thoughts
Thinking about the strategic reasons for launching new products will help you grow your business. Launching products is not just about generating revenue. It’s also a great way to learn about your customers and their needs, as well as to spread the word about your business. Even failure to launch products successfully can help you in that respect.
If you see a market need and have the resources to meet it, then by all means: go forth and create something new! You’ll be glad you did 🙂
