How to Identify the Key Success Factors in a New Product Launch
Key success factors are elements that must be in place for a small business to grow and be profitable. These elements vary by industry and by the company’s stage of development. For a new product launch to be a success, the first key success factor is that the product must offer superior benefits to the target customers when compared to competitive products that are already available in the marketplace. Identifying other key success factors requires the small-business owner to determine what has to happen for her new product to gain acceptance by large numbers of customers.
For the product to be a success, the small-business owner must set up a distribution system that allows the product to be available to its target markets. Ideally, the distribution system will have several channels so the prospective customers have multiple opportunities to buy it. The business owner must identify which channels work best for his particular product. Some consumer products work well being sold through direct-response channels such as infomercials, while others require a network of distributors or sales reps that can market the product to retailers.
One of the most important key success factors -- and from a small-business perspective the most difficult to successfully implement -- is building customer awareness about the new product. The small-business owner may develop an advertising and promotion strategy to build awareness. Using social media is another alternative, as is obtaining press coverage about the product. The small-business owner must identify which methods of building awareness have the greatest chance of success -- those that alert the highest number of potential customers for the least marketing cost.
The small-business owner wants to move customer prospects who are now aware of the product closer and closer to making a purchase, until they actually buy the product. To do this, the business owner must have a clear, concise marketing message that shows why the product is a different and better solution to the customer’s need than what the customer is currently using. This key success factor is twofold: impressing the customer with the benefits of using the product and positioning the product so the customer can compare its superior benefits to the benefits of competitive products. The small-business owner must identify what features are most important to the customer when making the purchase decision and position her product as clearly having these desirable features.
Identifying the right introductory price for the product is a key success factor, because price is one of the elements that most customers take into consideration when choosing what or whether to buy. The key to success with pricing is determining the price that will allow the business owner to earn a profit on each sale but is regarded by customers as a good value based on the benefits of using the product. Having the lowest price compared to major competitors could cause the company to lose money on the product and may not result in the large number of unit sales the business owner expects. Conversely, if her marketing message key success factor was effective, the customer will see the added value of the product and may accept a higher price.