Product Launch

Strategies when the product is late and launch goal is limited by the number of sales people

In the Goals, Readiness and Constraints: The Three Dimensions of Product Launch article in the current issue of the Pragmatic Marketer, David Daniels presents an analysis of launch constraints of a hypothetical $100,000 Version 3 product that was six months late. In addition, a product feature that the sales group had been promoting was not going to be included in the proposed release. 

The new product development environment at this fictional company is characterized by handoffs. When 'development' thinks that the product is 'ready' it is release to marketing and sales representatives. Representatives from the different groups do not have the same perspectives. Often different groups have different versions of success. 

In some companies, software developers may have a prominent goal of 'shippable product.' The sales group may have the prominent goal of 'meet quota.'

In the development group, such goals promote a myopic attitude that as long as requirements (BDUF - big design up front] are met and the existing quality assurance tests (finding and fixing software bugs) are met, the product is released to manufacturing for distribution to customers. A separate group of marketing and sales representatives is assigned the responsibility of finding ways to 'sell the product they have.'  

There are many insights in the Daniels' article. One strategy may be to find solutions within the marketing and sales groups. Another strategy is to nourish an integrated new product development environment with more cooperation and collaboration.

In the remainder of this post, I have re-posted my comments to the original article.

I found that the most pivotal sentence in this story was: 

"Clearly, the launch goal is limited by the number of available salespeople." 

This statement frames the situation as if the only two actions would be to change the launch goal or to requisition more sales people.

If this situation is representative of most of the company's new product development efforts, then there are company culture issues to resolve. Efforts to patch the current Widget 3.0 launch situation will be a distraction. 

The Widget 3.0 development efforts are seen by Sales/Marketing as over budget and six months late. Development dropped a reporting feature that the sale team has been promoting. 

The sales Team (7 people) has lost confidence in Widget 3.0 and plan to sell other products to make their quota. I predict that more sales people will not be hired, trained, and contributing within the 9 month quota period. If more sales people were hired, this would not resolve problems that will still exist when Widget 4.0 is available. 

The larger opportunities require changes of the company culture. 

• One problem can be characterized as too many silos. The lack of collaboration between development and sales/marketing is costing the company millions of dollars a month. Improving collaboration should be a top objective for the CEO. 
• Development needs to hire some design and programming expertise. Being six months late and dropping a reporting feature indicate problems that should be revolved with training and co-development with other specialists. 
• Rebecca in Marketing Communications (who in limbo because of the Widget 3.0 delays) has some unique options. Since there are only 7 sales people and a handful of sales per month, communication can be supplemented with video conferences and online collaboration tools. The extended team (sales, marketing, product marketing,...) should be able to work as a dispersed team to evolve the required assets.
• Since the Widget 3.0 project is already six months overdue and there is contention about the importance of a report feature, a high level team should finalize a plan (within one week) to resolve the situation with integrity. The current 1.0 and 2.0 customers must be satisfied with the promised deliverables. I suspect that a workable solution can be achieved by hiring the expertise and that an acceptable product can be ready within three months.
• Bob, the VP of Sales should explore other options to make the overall sales quota and modify the CEO's expectations. He should reconsider building a new Widget 3.0 pipeline because the previous prospects became “lost opportunities because of the current product features.

The strategy that prevails will depend on the convictions of the leadership and the strength of the analysis. However, I predict that the company will be more profitable when they increase the collaboration of all the contributors that develop and launch new products.

Chapter review of "Modeling the New Product Development Process"

Chapter 13 of the "Handbook of Research on Knowledge-intensive Organizations" by Dariusz Jemielniak (Editor) and Jerzy Kociatkiewicz (Editor) [672 pages, Information Science Reference, 27 February 2009] contains reviews of five common models of the new product development process. Chapter 13 is "Modeling the New Product Development Process: The Value of a Product Development Process Model Approach, as a means for Business Survival in the 21st Century" by Jonathan D. Owens, University of Lincoln, UK. These five models are:

• Stage-Gate model
• Multiple convergent process
• Product and cycle-time excellence
• Total design
• Third generation NPD process

Besides a brief description of each model, the author presents percieved weaknesses of each model. For example, the Stage-Gate model "encourages isolation of functional areas."   

The models are characterized by generation. The phase development models of the 1960s are the first generation of defined product processes. Sometime, these are known as over-the-wall processes because development is handed to the next functional group. The second generation models are based on based upon Stage-Gate type models plus cross discipline structures. Currently, the third generation processes are relatively inadequately defined but incorporate the management practices of concurrent and simultaneous engineering.

The author reports that "Since many product development authors and practitioners have reported these positive results, it is no wonder that they are driven to try and capture the essence of good product development practices and processes. Therefore, in an effort to make the task of modeling the process more manageable, different authors have tried to summarize their complexities by generalizing and minimizing differences between companies and products. However, because of this the models are often only a representation of the process...none have been found that depict the whole of the process for NPD with explicit emphasis on customers needs compliance." (page 222)

This new product development chapter is a small portion of a knowledge management resource. It provides insights on the transition from new product development models that were more suited to command-and-control teams to inter-organization, collaboration networks. This chapter does not address how to create knowledge and transfer knowledge at the developer level.

Sales Readiness Strategies and New Product Development

New product development includes selecting a sales readiness strategy. One of the goals of sales readiness is that customers will not abandon purchases because something is missing or unfinished.

This episode is a companion to my December 2008 Visions magazine article titled “Proactive sales readiness strategies can help companies sell new products more efficiently.” You can link to this sales readiness article from the OpLaunch web site.

A common belief about sales readiness

You may have heard the phrase “build it and they will come.” The wishful implication is that once a new product is built, an abundance of sales will follow. A more comprehensive statement was made by Ralph Waldo Emerson in Decatur, Illinois and recorded by Daily Republican on 19 May 1882.

“If a man can write a better book, preach a better sermon, or make a better mouse-trap than his neighbor, though he builds his house in the woods, the world will make a beaten path to his door.”

Just building a new product doesn’t guarantee abundant sales. Achieving abundant sales requires more effort. An appropriate sales readiness strategy is a critical part of any new product development effort.

Common perceptions about sales readiness

What are the common beliefs associated with the phrase ‘sales readiness’ that address activities that are most visible after the core product is built and introduced?

From the buyer’s perspective, sales readiness implies that the product is available for purchase. It implies that the product can be found on the shelf or online and that it is ready for the intended use. When a product is sales ready, customers expect to find pricing information, online product reviews, and support.

From the producer’s perspective, sales readiness may imply that sales of the new product are beginning to contribute to quarterly revenues. Internally, this signals that the development team can be re-assigned to the next project or other new responsibilities.

Perhaps the most common marketing reference for the phrase ‘sales readiness’ is from Pragmatic Marketing. The copyrighted Pragmatic Marketing Framework specifies sales readiness as a tactical activity that includes “channel training, collateral and sales tools, white papers, and competitive write-up.”

It is common for the sales organization to complain about tactical sales readiness activities. One way to improve the tactics is to refine the strategy.

Without an appropriate strategy, the sales readiness information will be unorganized, duplicated, or obsolete. The sales organization will complain that it takes too much time to find the best resources.

Contributors to sales readiness

In new product development, preparation for sales readiness includes contributions from developers, domain experts, market experts, and managers. Sales and distribution organizations provide another group of potential contributors. In addition, customers can contribute to sales readiness.

With so many potential contributors, how do organizations coherently improve the sales readiness of new products? With so many options, coherence is the key to selecting appropriate strategies. One approach builds on historic patterns. Another approach attempts to manage emergence.

A rigid approach to sales readiness

Some organizations demand strict adherence to documented processes, established practices, and templates. Components are collected from previous projects and they are combined with items imported from popular literature. Sometimes new types of components are assimilated from new team members.

Typically, sales readiness items related to channel training, collateral and sales tools, white papers, and competitive assessments are produced as a result of a formally budgeted process and a perception of what seemed to work in previous projects.

Unfortunately, there is a problem. Components that may have been successful on previous projects are not guaranteed to be successful in different contexts. Hopefully, capable team members can make the appropriate adjustments to these components to produce acceptable results.

A strategy to manage emergence

A strategy to manage emergence is appropriate when there is more than one way to obtain a solution. The solutions that will provide the best results are not known in advance. An emergent approach embraces distributed cognition. Web 2.0 capabilities, such as feedback and user generated content, are required to support emergent approaches. This strategy is based on a complex adaptive system model. My favorite author on this subject is Dave Snowden at Cognitive-Edge.

An emergent approach is characterized by lighter constraints and it seeks to manage emergence. This coordinates efforts and minimizes lost opportunities.

As described in the Visions article, the SAVO Group product supports this capability. Representative from the sales, marketing, development, and management collaborate to improve the development process and the sales process.

Recommended sales readiness strategies

Maximizing sales readiness requires more than following documented processes, established practices, and templates. You can not guarantee the best strategy by polling the sales representatives and ranking the results. The preferred strategy must have the capacity to handle actual variability and unknowns.

To maximize the robustness of a sales readiness strategy, consider a program that produces a comprehensive set of resources that are available near product introduction. This requires qualified leadership to select and implement the appropriate strategy elements and the appropriate budgets for implementation. Rigid choices are made to meet prerequisites. There are preconceptions about the results that will be produced.

After product introduction, consider a strategy that evolves. A strategy that manages emergence within boundaries benefits from distributed cognition because it leverages the cooperation of individuals, formulation of a community, and feedback. An emergent approach has the greatest impact when leadership actively includes this strategy as part of new product development by supporting tool sets required and rewarding those that contribute.

Over time, the sales readiness implementation selected for your new product can evolve into the strategy for your current and legacy products. Then it can become vital to new sales representatives and new customers. Ultimately, your sales readiness strategy impacts the sustainability and growth or your company.

Listen to Sales Readiness Strategies and New Product Development [9:16 minutes, 4.7 MBytes, (m4a)] Apple QuickTime / iTunes is required]

Gates as Gatekeeper

How do new product development contributors (such as designers and developers) maximize their effectiveness with high profile management representatives at project review meetings? 

Gates

In new product development, major project review meetings may be called gates. This designation is used in methodologies such as Stage-Gate. Typically, new product development teams are required to make presentations to management representatives every one or two months during development. These meetings are required to continue the funding for development of the new product. At the end of the review meeting, the gatekeepers provide comments about the project and make one major executive decision:

• GO - Project funding will continue. Additional work is approved.  
• Conditional GO - Project funding will continue after amendments are approved. 
• STOP - Additional funding is not approved. Additional work is not approved.
• WAIT - Funding and/or work is suspended. Additional information or a change in external conditions is required before a Go/Stop decision is made.

Gate meetings may provide an opportunity for the team to request feedback and additional support. 

HiPPO

Often, there is one prominent executive that must be favorably impressed for the project to continue. From the development team's perspective, the perceived competence of this prominent executive can range from low to high. This executive may not be involved in daily project activity. This executive's assessment of the project can be termed HiPPO. This acronym is Highest Paid Person's Opinion.

How does a new product development team ensure that the project receives a favorable assessment? In the case where the team is doing outstanding work, the team should strive to address the preferences of the reviewers. 

Some reviewers demand impressive analytical data. Sometimes, aggressive financial projections are required. Some reviewers are more likely to provide a favorable assessment when they hear a requisite number of their favorite buzzwords. In 2008, popular buzzwords included green, innovative, and de-duplication.

If the team's performance is problematic, consider postponing the review. Attempt to resolve some of the issues before the review meeting.

Bill Gates' Reviews

At Microsoft on 30 June 1992, Gates functioned as a gatekeeper for a new version of Excel. At that time, Microsoft had approximately six layers of management. Gates transitioned from his day-to-day role at Microsoft at the end of June 2008.  

Joel Spolsky is a co-founder and the CEO of Fog Creek Software. In the July 2008 issue of INC magazine, he recounts his preparation for an Excel project review meeting in 1992. Spolsky states "We used to have these things called BillG reviews, at which Bill Gates personally went over every major new feature."

The day before the review, Spolsky sent Gates a few hundred pages of project specifications. In addition, Spolsky investigated details of previous versions of Excel and Microsoft BASIC.

As the review progressed, Gates' questions became harder and more detailed. He asked a question about compatibility between the code of Excel and BASIC. To the surprise of almost everyone in the room, Spolsky provided the correct, informed answer. He knew the details because of his research the previous day.

Spolsky reports "Bill Gates was amazingly technical, and he knew more about the details of his company's software than most of the people who worked on those details day in and day out." According to Spolsky, Gates "didn't meddle in software if he trusted the people who were working on it."

HiPPOs and what to know

Since Gates was confident about the team's progress, the development team resumed their planned development activities immediately. 

Since both Gates and Spolsky were programmers, the dialog was concise. The highest paid person's opinion was venerated. 

Often the development team is technology-centric. Often the HiPPO is sales-centric, marketing-centric, or business-centric. Here are a few suggestions:

• Designate someone to take notes. Comments may range from directives to ceremonial placeholders. If a question can not be answered during the review meeting, assure attendees that the issues are being recorded and will be addressed appropriately.
• Evaluate comments using the project's major objectives. In the case of the launch success objective, welcome diverse comments and make appropriate adjustments. 
• Some comments are not project-centric. An attendee may be scouting for resources for another project. Some activity may be gamesmanship. 

An abundance of opinions are expressed in new product development review meetings. Some opinions may begin with a phrase such as "I know" or "I am sure." Someone will paraphrase what they gleaned from a recent article or book. Expect to hear opinions that reflect popular topics. Often, it is easy to have a preferential bias to the opinions of the highest paid person. It may be difficult to differentiate an impromptu comment from a decisive comment.

Resolving Conflicts

Conflicts will arise. There are several keys to resolving new product development conflicts. Briefly summarized, these are:

• New product development is best approached as a complex adaptive system. NPD is non-deterministic. Results are not guaranteed. 
• Often, the application of survey data can be misleading because of context differences.
• Experimental results from your prototypes trump opinions, anecdotes, and metaphors. In addition to the core product, this includes the design of the user interface and sales/marketing items such as advertising strategy.  

Conditional GO and Conditional Acceptance

An unconditional 'GO' decision at the end of a review meeting is rare. In practice, a more likely outcome is a 'Conditional GO' decision from the review team. 

Your team should analyze proposed project adjustments within the known constraints. The additional assignments should prompt the team to re-evaluate project commitments. Until your team has evaluated the implications of the additional requests, the acceptance of the additional work must be conditional. Previous deadlines or resources allocations may be invalid.

If the new request requires that your team commit to more work, don't agree immediately.  Don't give the impression that the original estimates were inflated. Don't commit to working more nights and weekends. Don't risk a potential drop in quality without careful analysis and the input of your team. 

Before committing to new requests, it is OK to spend a few hours to evaluate the new request and study the implications.

Listen to Gates as Gatekeeper [10:24 minutes, 5.1 MBytes, (m4a)] Apple QuickTime / iTunes is required]

New Product Development and Introduction Opportunities for Small and Medium Manufacturers

What makes it difficult for Small and Medium Manufacturers (SMMs) to innovate? This post explores new product development and introduction (NPDI) opportunities for SMMs and presents a few suggestions about paths to successful implementation.

Listen to New Product Development and Launch Opportunities for Small and Medium Manufacturers [8:31 minutes, 4.4 MBytes, Apple QuickTime / iTunes is required]

According to Bill Canis, "More than 60% of small manufacturers lack a defined new product development and introduction process. In most companies, ownership of innovation is distributed throughout the organization, but in SMMs, this function is typically managed by a single senior executive or business owner."

Canis, the acting President of The Manufacturing Institute, an arm of the National Association of Manufacturers (NAM), was quoted in the 19 December 2007 issue of IndustryWeek.

Why Innovation is Important to SMMs

In 2007, many companies made innovation commitments. The NAM report summarizes why innovation is important to SMMs.

It states:
"Improvement and innovation go hand in hand. A commitment to innovation and new ways of doing business—in products, processes, technologies and strategies—frees assets and opens up selling opportunities for SMMs. A focus on innovation will keep your company from becoming a stagnant operator (incapable of improvement) or a commodity player (always under price pressures)."

The Quest to Innovate

While SMM efficiency experts may strive to produce undifferentiated products at incrementally lower and lower costs, innovators tend to focus on the design and development of new, differentiated components.

The quest for innovation has become so important that many large companies have begun to import innovation from their partners. Sometimes such an arrangement is formalized and called co-development.

How can SMMs be both a preferred supplier of commodity items and a source of innovative components and products?

Why Successful NPDI is Difficult for some SMMs

When executives ask their organizations to be more innovative and to produce new products, their organizations may tend to temporize - to yield to the current circumstances. For some, resolving today's problems and attending to daily administrative duties tend to overwhelm innovation initiatives.

Beside competing priorities, company leaders may be unsure of what to do because of the multitude of opinions and choices about how to become more successful. There are many advisers, many templates, and a large variety of tools. In addition, many of the common processes and tools are better suited to development groups of 50 people or more.

Existing NPDI Advantages for SMMs in 2008

Because of a flatter organizational structure, SMMs should be able to implement faster than larger companies. Because of proximity to end customers, SMMs should have the insights to make informed new product decisions. When these advantages are combined, SMMs can have a greater potential be the first to adopt the new technologies that will enable them to produce high value components and products.

SMMs already embrace some concepts familiar to NPDI specialists. For example, items 1-3 of "The 15 Best Practices of Today’s SMMs" summary contained in the The Future Success of Small and Medium Manufacturers: Challenges and Policy Issues publication relate to voice-of-the-customer (VOC), product differentiation, and benefits derived from a defined new product development process.

An NPDI Implementation Plan

Here is a portion of a general plan for the transformation of a SMM that produces undifferentiated components to an organization that is also a NPDI innovator:

1. Senior management makes the commitment to NPDI and dedicates resources to architect the transformation. Success requires more than a cursory effort. Typically, when internal resources are assigned to such a task, they will not be successful if they can allocate only 10 percent of their time to innovation while maintaining their other daily responsibilities.
2. Initially, the innovation leaders receive an appropriate budget to enlist the help of external specialists. In the second and third years, the innovation budget grows appropriately.
3. Middle management communicates that they endorse the participation of employees in the NPDI activities. Individual employees are rewarded (not penalized) for participation. The metrics used for employee reviews are modified. For example, a monthly quota may need to be relaxed to accommodate an NPDI effort.
4. The innovation leaders are given the authority to recruit other employees to be dedicated to cross- functional, NPDI teams.
5. The organizational culture evolves to embrace NPDI efforts that include new risks and new uncertainties.

The transformation will require additional organizational capabilities. The organization has to gain expertise in making decisions about which new product opportunities to pursue (which is also known as the front end of development), building a product development network, and implementing launch and commercialization decisions. Typically, a list of new contributors will include:

• Domain experts that can predict specific industry trends
• Designers
• Communication specialists
• Regulatory compliance experts
• Knowledge workers that can adapt to changes
• Supply chain experts
• Collaboration facilitators
• Product development and introduction (commercialization) specialists

These resources do not all have to be employees. Dynamic, virtual networks can be very efficient. It is more important to select the appropriate resources and maximize collaboration to plan and implement new product development innovation.

What suggestions do you have for SMMs to actualize an NPDI process?

Why Successful Developers Invest Their Time to Create Diehard Fans During Product Launch

This post explores ideas that can guide some of your new product development decisions to a higher return on investment (ROI) at product launch.

This post was inspired by a video featuring David Maister titled Marketing to Existing Clients. Maister is an authority on the management of professional service firms. I will start by reviewing the primary idea that Maister proposed in his video and then I will show how this idea can be applied to new product development and launch decisions.

Listen to Why Successful Developers Invest Their Time to Create Diehard Fans During Product Launch [9:08 minutes, 4.9 MBytes, Apple QuickTime / iTunes is required]

The Best Investment for Your Non-billable Hours
Maister was speaking to a group of professional service providers who were exploring ways to grow their business. He asked, "What is the best investment you can make using your non-billable hours? Where do you get the highest ROI?" To explore these questions, Maister fashioned a 2x2 matrix to represent their market. One dimension specified awareness of a particular problem that had been solved by this service provider. If the prospect is not aware of the problem, the prospect has to be educated about this problem. The other dimension characterized the relationship. If the prospect is not a client, trust has to be earned before a sale can be made.

In this 2x2 matrix, the quadrant in the lower right represents prospects that are not aware of the problem and not a current client. Business development in this quadrant will be characterized by cold calls and assertions about the capabilities of the service provider. Operating in this quadrant usually requires a hefty advertising and promotions budget.

Based on the shear number of prospects, there is great opportunity but let’s focus on the ROI from the non-billable hours perspective. If you are a respected service provider, is this the most effective place to spend your non-billable hours looking for business? The answer is no. This is the quadrant that represents the hardest to get new business.

Now compare the opportunity in the quadrant in the upper left where the prospect is your client. Here, the prospect is familiar with the problem and your company. With the appropriate communication, your company should be favored to get any new business. If you are a respected service provider, the quadrant in the upper left has the best potential for gaining new business with the fewest hours of investment.

The Ultimate Question and Positive WOM
The quadrant in the upper left is very important to the rest of the discussion. Let’s take a brief look at two concepts.

According to loyalty expert Fred Reichheld, the author of the book Ultimate Question, the key predictor of long-term growth is the response to the question "Would you recommend us to a friend?" Imagine a small group of passionate advocates recommending your product to their friends. Now imagine the results of an online community of passionate advocates. Geometric growth is possible.

What I am describing is naturally occurring marketing. John Moore of Brand Autopsy refers to this as Evolutionist word-of-mouth, WOM. It is about diehard fans spreading favorable experiences. A Creationist Word-of-Mouth vs. Evolutionist Word-of-Mouth video by Moore is available on YouTube.

Applications to New Product or Service Development
If you are involved with new product development and launch, the potential for geometric growth from favorable WOM is very attractive. Favorable WOM during launch can produce high ROI. Unfavorable WOM can be devastating.

Favorable WOM is important because it drives sales in the yes/yes quadrant and it helps you make sales in the other quadrants. Existing, knowledgeable clients can help you make more sales by recommending your company and your product to members of their trusted network of friends and colleagues.

Impacts of Negative WOM
All of us have had frustrating experiences with new products. You probably have a list of things that irritate you.

As a new product producer, you probably know that bad experiences are more likely to be shared than positive experiences. Enabled by the Internet, bad news spreads very quickly. It is easy to retrieve and read unfavorable customer reviews. Unfavorable WOM reduces ROI. Unfavorable WOM can overwhelm the intended impact of an expensive advertising and promotion effort.

Guiding Product Development and Launch Decisions
In almost all cases, there are specific development team efforts that have a significant impact in determining if the majority of WOM is favorable or unfavorable. What efforts are likely to result in your customers favorably recommending your product to their friends?

In this episode, I will summarize three of the many methods to improve favorable WOM without big additions to the budget.

The first is to focus on the efforts that produce better experiences for your customers. Ensure that your solution will stand up to their scrutiny. Beside the core product or service, ensure that the other commercialization tasks such as packaging, documentation, installation, and training provide a positive experience for your customers. Invest to eliminate hassles. Enlist the appropriate team to be prepared for launch, minimize the errors of omission, and minimize the time it takes to resolve problems.

The second method is to scrutinize communication strategies. Invest in communication strategies that will make your customers successful. Crafted advertising or assertions about specifications may not persuade prospects.

The third method is to facilitate ways for existing customers to share their positive experiences. For example, items like a helpful user manual or comprehensive online information make it easier for an existing customer to recommend your product to a friend.

To validate these ideas, think back to one of the most successful product launches of 2007.  The Apple iPhone team successfully implemented all three methods. For addition insights, listen to my Product Launch Buzz: Zero to Contender episode.

Let me close with this insight. Product launch is a wonderful opportunity to begin favorable new relationships with clients. Maximize your development investments to produce favorable WOM during product launch because diehard fans tell their friends.

Did your product launch strategy miss this unique opportunity?

A product launch strategy that includes a Woot-like launch can provide unique opportunities for development and launch professionals to sample customer’s buying behavior and improve launch campaigns. The inclusion of a Woot-like product launch provides a burst of insights about many individuals that are one click away from purchasing your new product. In this episode, I will share the critical difference between the opportunities of a Woot-like launch and other launch activities.

Listen to Did your product launch strategy miss this unique opportunity? [8:38 minutes, 4.6 MBytes, Apple QuickTime / iTunes is required]

Background on Woot and Woot.com

Woot is a relatively new word. A woot is an expression of delight and it is derived from a combination of the words “wow” and “loot.” Extending this idea, Woot.com attracts bargain hunters and well-informed buyers.

Woot.com pioneered the ‘one deal a day’ business model on the Internet by offering one discounted product for only 24 hours or until all the inventory is sold. Usually the motivation for the sale is to liquidate inventory of consumer electronic products. Occasionally, manufactures launch new products using Woot.com. These launch efforts provide a sneak peek for customers and valuable market insights for developers and manufacturers.

A Woot-like launch can be characterized as a “soft launch.” During a soft launch, activities are limited to a small segment of a defined market. Soft launches minimize risk while testing assumptions.

For example, an 8th of November 2007 product launch on Woot.com produced nearly 400 comments from a community of analysts and potential buyers. The discussion topics included product price, specifications, and value. Products from competitors were discussed. During the 24 hours of the sale, there was a debate about the price of an important consumable but after a few hours, the price of the consumable was resolved within the online community. Manufacturer’s representatives monitored the online discussions and occasionally contributed to the conversation.

The online discussions are candid. Comments about the product and the company are posted for all to see. The product is researched. Problems are highlighted. The online community may reject your product’s value statement.

What distinguishes a typical online sale from a Woot-like product launch?

The distinction is not about the size of the price discount or the number of units sold in a day. A product launch features a new product. One of the definitions of product launch is the initial presentation of your product to a target market.

A launch establishes the first impressions of your product. Customers will share their experiences of your product and other products from your company. For example, was it easy to start using the product? How was the customer service experience? Was the actual performance less than the specifications implied? Often, these first impressions are difficult to change.

Product launch is more than an opportunity for early market validation. For savvy developers, a soft launch provides an opportunity to uncover problems and resolve them before exposure to larger markets.

Practical considerations

When you are developing a launch plan for a new product, what is the outline for adding a Woot-like launch to your product rollout?

1. Have a good product. Ensure that all the commercialization tasks such as packaging, documentation, and training are ready for scrutiny. Ensure that adequate quantities of the product will be ready to ship at launch.
2. Before the launch, brainstorm ideas that you believe will create buzz. A common tactic incorporates an aggressive introductory price.
3. Before the launch, create the press releases and advertisements to communicate the exclusive offer.
4. On launch day, your home page should feature the new product. Prominently link to the site hosting the sale. Prominently link to the press release. Create special landing pages to support these launch promotions.
5. On launch day, assemble your team to monitor discussions, participate, and make adjustments. Typically, this team will include the product management representatives, sales representatives, tech support representatives, and specialists that can create and post web content. Ensure that other team members are available to handle all the questions.
6. The moment the Woot-like launch ends, update your new product content on your web site to reflect your new insights.
7. Review and revise plans for future launch activities

Implications of Community

What I have been describing is a Web 2.0 experience. It is social networking in action.

A Woot-like event provides real-time insights that can be used to adjust future launch plans. During a Woot-like launch event, buyers make actual purchases. This is more insightful than a proxy for customer intension.

A community of online buyers is more likely to include informed buyers. A community of online buyers is empowered by the diversity and expertise of its members. A community of online buyers provides comprehensive assessments that include more than the technology factors. A community of online buyers asks and answers questions.

For developers that desire to improve launch results, the great news is that certain mistakes or errors of omission can be corrected very quickly.

Implications

I am presenting the Woot.com story as an example. The challenge is to find ways to incorporate this type of opportunity into new product development and launch activities.

A Woot-like launch provides a burst of data. Your team should quickly analyze the data and respond to correct mistakes and improve the offering.

With opportunities such as a Woot-like launch, development and launch professionals can move beyond survey data and predictions as they adjust campaigns using the social networking capabilities of new online sites to test new product advertising and promotion.

Now new product development and launch professionals can monitor the discussions of potential buyers that are one click away from purchasing an actual product.

Can You Correctly Guess the Number of New Search Terms on Google?

According to Jonathan Rosenberg, Senior Vice President, Product Management and Marketing at Google, "20% of all Google searches every month are brand new search terms never typed in before."

This quote was reported by Mitch Joel via Twitter today.

Twitter is a mini-blog that imposes a maximum length of 140 characters per post. Twitter was founded in March 2006. A year ago, Twitter was a curiosity but services such as Twitter are poised to grow as mobile communications grows.

How does the quote and the source impact product development and launch?

The Impact of Social Networks is Expanding

Information from social networks is trusted more than many other sources of traditional product information such as press releases or brochures. The expectation is that professional spin experts do not embellish the information.

Do your development and launch plans address social networks? Is the quality of your product good enough to generate positive word-of-mouth reviews? Can your target customers repeat the key messages in one or two sentences? What changes are you planning in your advertising strategy?

New Search Terms

Since 20 percent of the terms Google users submit are new each month, Google must continuously gather and process new data to ensure that searches represent current perceptions.

How often will you refresh your product requirements for your next new product? How often do you refresh documentation for current products? How will you ensure that your search engine marketing efforts are effective? Will you bid on different pay-per-click terms next month?

Have you tried anything new?

What new communication methods do you plan to try in your next product launch? I'll cover one example of a unique launch, communication effort in the next podcast.

Is this the reason your new product launch will be late?

In a report titled "Best Practices for New Product Development and Introduction" from 19 June 2007 Ralph Rio, Research Director Enterprise Software at ARC Advisory Group states:

"On average, 45% of the products are released on schedule which means over half of new products miss their schedule."

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To improve these results, Rio recommends focusing on company goals and metrics that reflect top line revenue impact. Rio's summary provides insights on solving the problem of missed introduction schedules. His report uses the phrase NPDI leader - new product development and introduction leader. He reported:

"The NPDI leader also needs good skill in persuasion to gain agreement from managers to do something that is not optimal for their department, but is in the best interests of the corporation."

The NPDI leader's goal is to ensure that the appropriate people are engaged in development and launch activities and that their activities are coordinated to maximize efficiency to achieve the desired business results for the company.

Why it is important to fill this leadership role?

When new products are not available for purchase by customers on the promised launch date, top line revenue suffers. When missing information or services cause potential customers to abandon the sales process, top line revenue suffers. When customers that purchased your products are reluctant to recommend it, top line revenue suffers. Fixing these problems should be a new product development and introduction imperative. Some product launch problems are a result of errors of omission and that will be discussed later.

Assigning blame for poor performance

When there are inefficiencies and delays in the new product development process, who is blamed?  Frequently, one functional group blames another functional group. For example, a contributor with a strong allegiance to engineering may blame management for delays. This has been a recurring them in the Dilbert comic strip from its inception on 16 April 1989 to the present.

Here is some hyperbole about the cause of delays:

• Marketing and sales don't share the same goals
• Sales may criticize the 'factory' for not understanding the customer's needs.
• The product manager frequently complains about not having enough resources.
• Team members complain that their favorite solution was not selected.
• The project management specialist may rebuke contributors that miss critical milestones that were meticulously documented in the project schedule but were unattainable in practice .

Who fulfills the new product development and introduction leadership role?

"NPDI leader" is not a common job title. Who might fulfill this leadership role?

In some companies, the Product Manager is expected to provide new product development and introduction leadership. As described by David Daniels of Launch Clinic in "The Role of the Product Marketing Manager" the Product Manager and Product Marketing Manager have specific strategic and tactical roles but typically their influence is limited within the company.

In other companies, business development managers have broad responsibilities for several product lines. Usually the role of the business development manager is multi-disciplinary and impacts engineering, marketing, and sales activities. Therefore, business development managers are positioned to provide NPDI leadership.

The product champion or sponsor has broad influence and may be positioned to provide NPDI leadership.

Leadership and risk reduction

My July 2005 Visions article titled "Making Robust Launch Decisions - Part 1," suggested another way to analyze launch delays. The potentials for launch delay can be attributed to three types of risk. These three risks are based on an article titled "Why Good Projects Fail Anyway" by Nadim F. Matta and Ronald N. Ashkenas in the September 2003 issue of Harvard Business Review. The three types of risk are:

• Execution risk—The risk that designated activities won’t be carried out properly
• White space risk—Some activities will not be identified in advance
• Integration risk—Disparate activities won’t come together at the end

An NPDI leader must have a system-level perspective to minimize these three types of risk. Errors of omission increase these risks. To ensure top line revenue success, an NPDI leader must have a broad understanding of development and launch fundamentals and interdisciplinary expertise.

The Impact of Reductionists

In the absence of an NPDI leader, the viewpoints of reductionists prevail. Often, reductionists are masters of one discipline but a reductionist has a biased view that overemphasizes specific activities.  Reductionists at your company may have job titles such as lead engineer, manufacturing supervisor, purchasing manager, or market analyst. For example, a reductionist might declare that the "all the engineering drawings for a product have been approved" or that "the brochure is finished." The problem is the failure to appreciate the other contributions necessary for a successful launch.

Reductionists are specialists. Their contributions are required for successful new product development and launch. For maximum success, an NPDI leader guides the activities of these specialists.

Examples of successful new product development and introduction leadership

Here are a few examples of successful companies that have NPDI leadership.

• At Toyota, this new product development and introduction leader is called a shusa [see Results and Rewards of Sustained Innovation in Development and Launch].
  
• At Apple, an NPDI leader is Steve Jobs. He provides system-level thinking that dramatically coordinates development activities and impacts launch schedules.
• The 37signals team of experienced, enthusiastic, multidisciplinary designers and developers has adopted a unique commercialization philosophy.

Who is best equipped to provide effective and efficient new product and development and introduction leadership at your company?

Lessons Learned for Market Launch - 2007 B2B Survey

In a 17 October 2007 press release, Schneider Associates, a marketing communications firm, and the Center for Business Innovation at Babson College announced a report on the best practices for conducting Business-to-Business (B2B) launches. The research identified 10 lessons that improve the chances of launch success. As listed in the press release, the 10 lessons were summarized as:

• Have a documented launch process.
• Establish a separate launch budget.
• Establish your launch budget as early in the product development phase as possible.
• Try to keep your launch budget stable throughout the implementation phase.
• Determine your launch performance measures before the launch begins.
• Measure the right success metrics.
• Include the right external professionals on your team.
• Fight for bigger budgets.
• Do a great job educating your sales force and other internal audiences about your new product or service.
• Spend money on word-of-mouth campaigns rather than on advertising.

For comparison, the 10 strategies for launch success presented in Joan Schneider's 2004 book were:

• Treat Launch as a Separate Phase
• Have a Plan
• Don’t Carve Your Plan in Stone
• Learn to Live with the Inevitable Delays
• Spend Money on Products That Are “New”
• Assemble an Expert Launch Crew
• Brand/Product Managers Make the Best Team Leaders
• Bigger Budgets Fuel Success
• Consumer-focused Spending Prevents Crash Landings
• Don’t Overlook PR

Both lists include the recommendation regarding the selection of the appropriate people for the design and implementation of the product launch.

How do you ensure that the appropriate people are engaged in development and launch activities and that their activities are coordinated to maximize efficiency to achieve the desired business results for your company? I will explore that in my next post.