Common Mistakes That Can Lead to Product Failure

Signs that your product will fail

To significantly improve your chances of effective product creation, consider the following warning signs of impending product launch disaster. 

1. You haven’t validated your product idea.

New products must fill a need in the market, so it’s essential to evaluate whether that need exists. Here are some ways to validate your product idea:

• Check Google for keyword searches: Use Google Trends to see if people are conducting keyword searches related to your product or the problem your product is supposed to solve. If people aren’t looking for a solution, that’s a red flag.
• Read competitor reviews: If the product category already exists, look at online reviews of competing products, focusing on the bad reviews. What do customers say is missing? What don’t they like about your competitors’ products? What else would they like it to do?
• Consult customer-facing employees: If you have an existing company in the space, ask your sales team what customers are requesting. Likewise, ask customer service representatives what customers wish for and complain about. 
• Get consumer feedback: Ask current customers what their needs are and how they feel about the proposed new product and its features. Online and email customer questionnaires are an excellent way to gather valuable marketing survey data and gain insight into what customers want and need.

2. You haven’t researched the competition enough. 

Maybe there’s a need in the market, but someone else is already fulfilling it and there’s no space for you. While some markets have room for competition and many products add a new twist to an existing concept, some markets are too small. Your product may not be substantially different or better than established competitive products. 

For example, when Amazon launched its Kindle e-reader device, it threw its substantial resources and marketing platform behind the product and established a strong presence in the market. Then, Barnes & Noble came out with a competing e-reader called the Nook. The Nook failed because it was not better technologically or feature-wise, sold at a similar price, didn’t have the largest bookseller behind it and arrived in the market after many people already purchased a Kindle.

Do substantial market research to ensure there’s a large potential market for your product before investing in development. Monitor social and technological trends and research customer complaints and reviews for existing products in the space. The goal is to ensure there’s a place for your offering. 

3. You haven’t thought about production and fulfillment.

You may have an excellent prototype, but starting your marketing campaign before figuring out production and fulfillment logistics is a mistake. What if your marketing is wildly successful? You must ensure you can fulfill orders quickly so you don’t disappoint customers, diminish customer loyalty and give competitors a heads-up to fill the gap with their product version.

At first, consider limiting your marketing and doing a soft launch to work out any production or fulfillment kinks while you gauge the market. Then, when you know there’s a strong demand, ramp up your marketing outreach and production capability to maximize sales and minimize warehousing costs. You may also want to consider the benefits of an order fulfillment service for your new product, including lowered shipping costs and seasonal flexibility. 

4. You didn’t secure your supply chain.

Similar to production and fulfillment issues, supply chain problems can tank a product launch. You may have conducted extensive market research and painstakingly engineered your product. However, if you don’t set up a viable and affordable supply chain distribution plan, your startup may be doomed as your customers face delays in receiving the products they purchased. 

It’s crucial to secure your supply chain. First, determine whether you’ll manufacture the product or hire a third-party manufacturer. What raw materials will be needed? Research the best suppliers, manufacturers (if using) and logistics companies and lock down contracts with them.

Consider researching alternative vendors, so that if one of yours experiences a problem, you can shift to a new solution without impacting distribution. Ensure flexibility in your vendor contracts so you can continue to produce and supply your products to retailers and customers uninterrupted if something unexpected occurs.

5. You haven’t done a feasibility study.

While you and your team may think your product is perfect, you must run it by potential customers to get honest feedback. In the early stages of product development, ask focus group members the following: 

• What features would they like to see in a product of this type?
• How do they envision using the product?
• How much would they be willing to pay for the product?
• What potential obstacles or problems would they want to avoid when using the product? (For example, a device meant to be portable should not be too heavy or bulky.)

If you have a prototype, let your focus group use it with minimal instructions to see how easy it is for them to operate. Note their confusion, frustration and delight as they use it in various ways. Additionally, use their pricing feedback to determine if you can produce the product and make a profit. 

6. You don’t have a marketing funnel in place.

Launching a new product without a way to generate demand for it is a sure way to fail. Invest in high-quality copywriting, website design, landing pages, a social media presence, ad copy and email drip campaigns. Be sure to allocate sufficient money to advertising, SEO and social media marketing to get the word out quickly about your amazing new product.

7. You didn’t launch your product in a timely manner.

Ideally, you will launch your new product at a time of high demand and unfulfilled need. However, if you take too long and continue to add features, you may miss this crucial window. Other companies may see the opportunity and go to market while you tweak your product, establishing themselves first. 

If your product is solid (not buggy or prone to breakdown) and the time is right, launch it as is. You can always do product updates later.

8. You don’t believe your product will succeed.

If you don’t believe in your product and its value, getting others on board will be challenging. Concentrate on the product’s benefits for your customers, employees, company and yourself. This passion will give you the motivation to push through during challenging times and win over skeptical customers. Others will pick up on your energy, so keep it positive.

If you can’t fulfill your vision, try different approaches based on your customer and market research. If your product does end up failing, it doesn’t have to be the end. Use the lessons from the experience to make your next product launch more successful. 

Consequences of product failure

A product failure can damage your business in several ways, including the following:

• Product failures can be financially devastating: Creating, marketing and selling a product is expensive. You may lose your financial investment in engineers, programmers, commercial designers, packaging companies, raw materials, manufacturing and logistics, marketing costs and much more. 
• Product failures have an opportunity cost: Product failures represent an enormous investment of time and effort on the part of your team — resources that might have been better channeled toward other, more profitable avenues and ideas.
• Product failures can kill a business: If your business was predicated on a new product that fails, the business may also fail. 
• Product failures can damage a business’s reputation: When your product is a flop, you’ll likely garner negative customer reviews and unfavorable press. Even if your company has other successful products to fall back on, the organization’s reputation for quality may be irreversibly damaged. 
• Product failures can cost you key staff members: If you hired brilliant professionals for a new product launch and the product fails, you may need to lay them off — or they may quit. Existing employees may become demoralized, affecting your overall company morale.

How to avoid a bad product launch and product failure

Follow these tips to give your product the best chance of succeeding. 

1. Define your target market.

Who will buy your product? Your first reaction may be “everyone,” but that’s unlikely. Sit down with your team and discuss what problems the product solves and for whom it will solve them. Who will benefit from your product and what types of people will buy it? 

Sometimes, your buyers won’t be the people you expect. For example, as the COVID-19 pandemic kept millions of people at home, LEGO shifted to embrace adult users in addition to children and their parents. To cater to this unexpected market, the company created more intricate and complex designs targeted at adult users, such as LEGO flowers, bonsai trees and a large-scale Lamborghini. To reach this target audience during the pandemic, the company devoted more resources to social media advertising than retailers and in-person outreach at shopping malls.

To help identify your target market, create buyer personas, especially if several customer types are interested in your product for various reasons. Each persona should include an ideal customer’s age, income range and other demographics as well as their motivations and pain points. Imagine what each buyer persona would consider when choosing whether to buy the product, what emotions and goals would motivate them to buy and how they would use and react to the product.

2. Create a compelling value proposition.

Presumably, when you came up with the idea for your new product, you had a reason. Now, it’s time to fine-tune that value proposition. Ask yourself why a customer would buy this product that they have never heard of before. 

In most cases, your product will solve a problem; sometimes, it’s a problem customers didn’t even know they had. This is common with tech products; for example, before the smartphone, most people didn’t know they “needed” a camera, phone, computer, video game console, GPS navigation, clock and more all in one device. Similarly, before Facebook and Instagram, people didn’t think they had to know what all their friends were doing and thinking at any given time.  

Follow these steps to create a compelling value proposition: 

1. Define the customer’s problem: What are they trying to accomplish? Think about tangible goals, such as “I’m hungry, so I need to eat food,” and emotional goals, such as “I want to feel good about myself for eating healthy.”
2. Research the competition: Be aware of your competitors’ value propositions. How are they positioning themselves and how are you distinguishing your value proposition? Determine your unique selling point to distinguish your offering from the competition.
3. Consider your competition’s shortcomings: Analyze competing products and substitute problems that currently address your value proposition. What is difficult, slow, inconvenient, unavailable, poor quality, boring, unaffordable or inefficient about them?
4. Know how your product solves problems: Highlight the most fundamental ways your product solves the customer’s problems and does it better than existing options. Again, this analysis includes tangible and emotional outcomes. Outline how after (or while) using the product, the customer will be happier, more entertained, save time and money or be more effective. 

3. Price your product correctly.

Success requires more than having the right product with the correct value proposition. You also need to set a price that customers are willing to pay while still providing the company with enough profit.

Here’s how to price your product correctly:

1. Be aware of your costs and break-even point: You’ll need to conduct a break-even analysis. How much does it cost to produce or source the product? Include incidental costs, such as shipping raw materials, fulfillment, storage, manufacturing resources and sales. Add all these costs to get your break-even point. Any amount over this will be profit.
2. Determine how much competitors charge: Conduct a survey of competitive and substitute products and their prices. Be sure to compare “apples to apples” for a more accurate analysis.
3. Consider your target market’s price sensitivity: Consider how much money your customers have (household income) and how willing they are to spend more on this product class. For example, a person may have a low to middle income but might be willing to spend more on a baby car seat because their child’s safety is their highest priority. 
4. Go back to your original value proposition: If your target customer already buys a competitive product, will they be willing to pay more for your product based on your value proposition?
   • If your value proposition includes saving money, you’ll likely want to price your product lower than the competition. 
   • If your value proposition is “better value” because it has higher product quality and lasts longer, consider pricing it higher than competing products. 
   • If your product’s value proposition is much stronger than competitors’ or it’s positioned as a luxury alternative, you should be able to command a higher price.
5. Test your product’s price point: Test your product at the price you decide on and see how customers react and how many products you sell. If sales are lower than expected, you may need to tweak your pricing or provide a lower introductory price.
6. Invest in a marketing splash to launch your product.

With a feasible product, a well-researched target audience and an ideal price point, it’s time to launch your offering with a marketing splash. Product launches require a significant marketing investment so you can establish brand awareness quickly, educate your target market about your product’s desirability and generate revenue.

Your marketing methods may differ depending on your product and market: 

• Business-to-consumer (B2C) product launches: If you are selling a B2C product exclusively to retailers or wholesalers, consider attending industry trade shows, using manufacturers’ reps and reaching out to companies directly to schedule product demonstrations. You will likely need to provide promotional materials like end caps and signage. A B2C product you’re selling directly to consumers will need a broader marketing approach that may include social media and search ads, television and outdoor ads, pop-up stores and events.
• Business-to-business (B2B) product launches. B2B product launches can include marketing methods similar to B2C product launches, supported by online video demonstrations and white papers. They also benefit from social media posting and outreach, strategic partnerships and co-marketing partners and a robust online presence.

Allocate money in your marketing budget for a launch lasting between 90 days and a year, depending on your product and market. Plan for an ongoing marketing budget to continue to grow your customer base and sales revenue. Monitor your results and continually improve your message, creative content and media as needed.

4. Know what success looks like.

How will you know your product is a success? You may be shocked to find that everyone in your business has a different idea — or worse, no idea — of success. Your idea of success may change, but setting parameters early in product development is crucial.

To know what success looks like for your product launch, you must identify and track key performance indicators (KPIs) and use data to learn and adjust. 

Measure your product’s success with KPIs.

KPIs are essential for product success. To set and track goals for your business, you need some quantifiable, data-based indication that defines success. 

Consider these examples of KPIs:

• Total revenue
• Profit margin
• Number of unit sales needed to meet revenue goals
• Number of prospects, leads and conversions
• Number of repeat customers

KPIs should be key metrics for success, so you don’t need many. You’ll use the baselines for forecasting, risk mitigation and product maturation. Your team members must know what will indicate performance so they can tune their processes and strategies according to your KPIs. Anything else is shooting in the dark. 

No product improvement decision should be made without supporting KPI data and estimations based on a proposed change.

Use data to learn and adjust.

There’s a reason hypersuccessful businesses like Uber employ squads of data scientists and even former neuroscientists to use data to shape their products. Leveraging data is more about learning and adjusting than distributing cool-looking graphics to the public. 

Nobody gets it right the first time, but the best companies are prepared at launch to use data to drive iterations of their product to chip away at success. Uber applies massive amounts of data from its drivers and customers to improve wait times, locate hotspots, estimate fares and help ops teams find new drivers.

5. Ensure your entire organization understands the product.

You likely spend most of your efforts tailoring messaging to customers or the press, but is that messaging reaching your sales team? Are you asking your staff how the product should behave or merely telling them? 

Here’s an experiment you should try in your next sales meeting: 

1. Ask your sales team to describe the new product and how it will meet customers’ needs.
2. If they can’t articulate the product’s real benefits accurately, you’re not ready to launch. 
3. Halt your release plan until your sales staff has a core understanding of the product to the point where they can confidently convey its benefits to your customers. 
4. Perform this experiment with all departments that have any association with the product.

Just as identifying KPIs can help shape processes and strategies, ensuring all departments have an in-depth product understanding will lead to a much more successful launch and valuable product.

Airbnb is an example of a company with a hands-on approach that ensures employees are familiar with the product and customers’ needs. All new hires take a trip in their first or second week to document user pain points and they bring this knowledge back to work along with an organic understanding of customers’ needs. 

6. Be ready to scale.

You may be ecstatic that your product launch is going great. Your target market is buying, you’re getting good customer reviews and reorders are excellent. It’s now time to review your supply chain and production. Can you quickly ramp up production? Do you have the capacity to rapidly distribute your products to the customer? 

Review your list of supply chain partners and open discussions with them to supplement your production and distribution. This preparation will allow you to grow seamlessly.

7. Don’t put off tomorrow what you can do today.

In today’s highly advanced marketplace, you’re unlikely to be successful if you manage from the seat of your pants with no clear plan. Success requires more than a good idea; otherwise, we’d all be millionaires.

The world’s newest generation of mega-companies has shown that incorporating customer needs into the fabric of a strong company culture can eliminate internal messaging crises at the end of product development when it’s too late. 

These companies have a seemingly telepathic understanding of their customers’ needs and how their products help solve those problems. They also know the data points that clearly show how their product performs, allowing them to pivot quickly according to the market response.

This universal understanding and calculated measurement lead to a clearer launch plan, more sales, excellent customer support, a happy and motivated workplace and a product that does not fail.