Are You Ready to Add a New Product or Service? Some Questions to Ask
8/18/2008
Over the past years, many businesses have focused much effort on reengineering, cost reduction, downsizing and rightsizing. These efforts have produced profitable results in many cases. Given the business outlook facing many companies, such efforts were needed. But the environment has changed now. In many cases, the “low hanging” fruit from the cost reduction tree has been picked. Also, customers are starting to ask different questions like “what do you have new?” The near and longer term approach to business will need to be different than in the past. The question of “what do you have that is new, different, and better solves my problems?” will be increasingly asked by customers.
But while customers may be asking questions about what’s new, organizations may not be able to respond. The strong focus on cost reduction prevalent in many companies has had at least two less-than-desirable impacts in companies.
- First, some of the corporate growth "muscles," those innate or learned capabilities of an organization that cause it to seek and capitalize on profitable opportunities, have atrophied or, in some cases, have been lost.
- Second, the alignment between the value proposition the customer seeks and what the company is offering is poor. While internal improvements were being implemented, customers' needs changed. This created misalignment between the company offering and customer needs. When customers see that the features and capabilities of a product or service don't match their needs, price quickly becomes important.
Does this sound familiar? You know there are opportunities to grow and you want to capitalize on them. But if your time has been spent focused more internally, you may not be sure how to begin or what things are most important to consider. Here are some questions to consider as you start to launch a new product or service development effort.
Getting Set:
- Is there a logical way to assess the potential of a new idea and plan for its development?
- Do you have clear criteria regarding the types of new products that are most attractive?
- When you say "no" to a new product idea, is there a clear explanation given to the person who suggested it? The quickest way to dampen enthusiasm for new products is to dismiss an idea without an obvious good reason.
Getting Ready:
- If you asked key customers to tell you one thing they would like to see changed in the offering of any supplier, what is most frequently mentioned?
- Do you have a new product sales growth objective? What percentage of your sales do you expect to come from products you weren't selling three years ago? It is important to make this explicit.
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