The following is a guest post by Lisa Wheatly. Lisa works for TopAussieWriters.com in her free time, helping the team create honest and reliable essay writing service reviews. She found her true calling in business consulting. Lisa is also helping young entrepreneurs to scan the market, evaluate their ideas and bring new businesses to life.
Launching your own product is a high-risk bet. You’re investing a lot of time and resources, yet, you don’t know if your groundbreaking idea is going to produce the results that are expected. It’s widely known that most product launches in today’s marketplace tend to fail.
Some argue that the failure rate of a product launch can go to up to 80% to 90%. However, there are countless opinions on this subject, so you shouldn’t get discouraged right from the start. For example, R.G Cooper suggests that the product failure rate is not higher than 40%.
Either way, it’s obvious that plenty of entrepreneurs commit a lot of mistakes when launching their first products. The reason? It’s not just one. In today’s post, you’re going to understand the reasons why most product launches fail and you’ll get strong insights that should improve your startup launch success.
1. You Fail to Understand the Market’s Needs and Wants
Every successful business became “successful” because they have accomplished one important thing: they managed to deliver a lot of value to many people. But before doing that, be sure that countless hours and significant budgets were put into action.
The key to offering value lies in the understanding of what problems, needs, and wants can and should be fixed and fulfilled. In case you’re launching your product right now, don’t forget about the market research process.
Market research can be anything from collecting survey responses, talking to potential customers directly, or analyzing other big brands within the market. Without proper market research, you’ll be heading on the road blindfolded. Destination impossible!
2. You Target the Wrong Audience
You might do your market research well, you might have a great product, and you might have the drive to act and make progress. Nevertheless, you might still fail to launch your product successfully because you are doing one serious mistake: you chose the wrong audience to promote your product to.
Who are you targeting? Do you have a very specific description of your target persona? In case you don’t, I’d advise you to create one before spending any more of your budget.
Ok, but the problem is…how do you know which is the right target audience and target persona? This is an answer that only you can figure out. You understand your product’s concept better than anyone else. Now, it remains that you also succeed to recognize the right type of customer.
Many product launches fail not because their value isn’t amazing, but because the company fails to properly market the product to the right target audience. Start assessing your audience few more times. Are they really the ones you should be selling to?
3. Too High or Too Low Price
Many startups fail because they price their products too high or too low. Price is an essential factor of a marketing strategy, as it’s the only element that generates revenue. Many companies believe that because they’re new in the market, they should underprice their product in order to gain attention.
However, this often used strategy comes with many issues. In many cases, if the product is cheap, the customer will believe that it also lacks quality. Otherwise, how would it be sold for pennies compared to the competing products?
The opposite alternative doesn’t come without disadvantages. If underpricing products leaves money on the table and damages the reputation of the brand, overpricing can also provide unsatisfying results. Overpricing and underpricing are two results caused by entrepreneurs who fail to understand the value that they provide with their products.
If you want to price your products the right way, you need to carefully assess the amount of value you’re delivering. Set the prices according to how much your product is influencing your customer’s life. Does it do miracles? Or the problem it solves could be solved cheaper and in other ways? Ask yourself a lot of questions and test the price of your product more than one time.
4. Delayed Product Development and Launch
Failing to launch your product in the right timeframe could have a negative impact and could reduce your chances of business success. By the time you put the plan into implementation, your customers’ needs and problems might be already different from what you’ve found when researching your market.
Let’s say that you’re a big fitness guru who creates an amazing social media presence before the actual product launch. You capture your followers’ attention by delivering great content. Moreover, you show the results of your future product on yourself, a strategy that’ll improve your brand’s reputation and trust.
However, you’ve already announced the launch date of your “ultimate product” and the time has come. As your followers already expect the product to be ready for grabs, you’ll damage your startup launch big time if you cannot deliver.
That’s where many companies fail. They pre-market the product so well, only so that they can’t deliver it on time. Besides the reputation that’s going to be damaged, you might also “miss the train” as the marketplace’s needs change or a competitive product has already taken the lead.
5. Wrong Positioning in the Market
Successful new products are influenced by many factors. One of them is the brand positioning strategy. Every time you enter a new market, you must find your unique value proposition and focus on displaying it as much as often. Your unique value proposition is what makes you different from the competition.
If your product is original and unique, the positioning of your brand in the market should be heavily influenced by what you can offer and others can’t. However, there might be cases when your product doesn’t come with revolutionary benefits and problem fixes.
In that case, you must strive to find the proper positioning. There’s an entire positioning process that you should follow. If you have already launched your product and it has proven to be a total disaster, maybe you haven’t positioned your brand and product proposition in the proper way.
6. Mediocre Marketing
Marketing is the holy grail of business. You can have an amazing product that brings astonishing benefits to the user. Yet, if no one knows about it, you are likely to receive insignificant results.
Before you launch your product, you must have a marketing strategy already in place. You must understand where your target audience spends time at, how they spend it, who they spend it with, and so on. Moreover, you have to come up with various marketing strategies that will serve more things:
- Brand Awareness
- Will Bring Leads (subscribers, followers, etc.)
- Will Bring Sales
These are the main three criteria you should be looking after when developing your marketing strategies and campaigns. The key to a successful marketing experience is that you never stop testing. Even if you lose a significant amount of money, you might be very close to finding a high ROI campaign that can lead towards a better future.
7. The Product Doesn’t Deliver What It Promised
Lastly yet most importantly, if the product doesn’t deliver what it has promised, it will become extremely criticized. Along with negative reviews, your company’s ratings will drop. You’ll lose the trust of your potential customers the moment they believe a negative review of a previous customer.
It’s also logical. Let’s say you buy a watch that promises to have water-proof features. After two weeks of wearing it, it stops working because it had contact with water. Will you buy from that store again? Will you ever recommend that product to any of your friends? The answer is no.
And, if your customers aren’t talking good things about you, there’s no way to stand a chance in front of your competition. Soon enough, your sales will drop and you’ll start losing money.
Avoid all of these by being genuine with your product’s promises. Don’t lie in order to gain profits. Make sure that all of your products deliver what they are supposed to deliver!
As you’re probably aware, validating and popularizing your product is a tough process that can take many turns. However, keep reminding yourself that it’s truly worth it. Besides the financial freedom that you’ll obtain, you’ll also improve many people’s lives (through your product’s value) and therefore bring a high contribution to the marketplace.
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