The goods and services which sell best are those that meet a need – and demonstrate that they do.
To develop a product which will appeal to customers, companies need to research the aspirations, fears and dreams of their customer base. They also need to identify social trends, if possible before their competitors do. These elements should guide the innovation process, since what a company sells is the solution to a problem the customer did not even know existed. The main questions to ask yourself are:
- Is my product unique? Does something similar already exist on the market?
- Does it meet a need? If so, what need?
- What demographic profile will be interested in this? Is this a group with strong growth potential (older people for example)?
- Is production achievable in technical and financial terms?
- Is it safe and does it comply with legal standards in force?
A benefit for the customer
It is however not enough to only develop a product that appeals to customers, even if you are the first in a particular market segment. You will still need to present it credibly to your target market, demonstrate that it meets a genuine need and that you are the only one able to do this. The search engine Altavista, eclipsed by Google, and the social network MySpace, overtaken by Facebook, mismanaged this stage.
Rather than simply listing the advantages of your product (“my chocolate bar has only 50 calories” or “my tablet is only 20 cm"), you need to explain to the customer what benefit they will receive (“you will lose weight” or “you can fit your tablet in your handbag”). Because consumers do not buy a V8 engine, they buy speed. They do not buy shock-absorbing trainers, but comfort.
Targeting people known as “early adopters” also represents a profitable strategy. Always aware of new products, this group of people often have a big influence over others, particularly in the era of Twitter and blogs. If you can convince them to adopt your product, the odds are that before long this will translate into increased sales. Why not organize a small-scale promotional campaign targeting these early adopters? Or give them some free samples or a reduction on your new product?
The product runs out of steam
But even the best thought-out – and marketed – product sometimes runs out of steam. This happens in particular when all potential purchasers have already bought it (and when sales reflect only replacement of worn out items) or when competitors have entered the same market with a similar product. There are several solutions for managing this challenge:
- Stop sales. Abandon your product and move on to the next innovation.
- Find new uses. When the baking soda brand Arm & Hammer saw its sales fall, as people were spending less and less time in the kitchen, it reinvented itself as a fridge deodorizer brand.
- Revise the product, without changing it fundamentally. You can modify your packaging, your price, your sales channels or your geographic distribution to make the product accessible only to the proportion of customers still buying it, for example.
- Try and reach a new customer base. When the inexpensive beer brand Pabst Blue Ribbon realized that its customer base of truck drivers and workers was no longer enough, it reinvented itself, giving itself a young, quirky, trendy image, although without abandoning its roots. It quickly became the beer of hipsters.
Sources: Small Business Marketing Kit For Dummies, Barbara Findlay Schenck, John Wiley & Sons Inc., 2012; Purple Cow: Transform Your Business by Being Remarkable, Seth Godin, Penguin Group.