If you wanted to embark on a new business venture but knew it had only a five percent chance of success, would you proceed? Many would say no. And yet, thousands of companies begin the arduous process of launching new products each year, despite the bleak future of said products. Many times, they don’t understand the major reasons why most products fail and ways they can better their odds.
We’re not being pessimists, either. According to Harvard professor Clayton Christensen, out of over 30,000 new products introduced each year, 95 percent fail. So why the abysmal success rate, and what can be done to make sure your product isn’t just another statistic?
Here are six major reasons why most products fail, and our tips for success.
Poor Product/Market Fit
Early on, companies often fail to conduct adequate market analysis when developing a product. This results in a vague understanding of the product’s target audience, and potentially targeting the wrong market entirely. If the market doesn’t care about your product, you’ve failed before you’ve even begun.
TIP: Do your due diligence by conducting unbiased research into your target market, and what they expect from a product like yours.
Not Addressing Actual Consumer Needs
In our work as product developers, we see a lot of product ideas that, while intriguing, only solve non-existent problems. This is often because companies become so enamored by their own product vision that they’re unwilling or unable to hear user feedback — especially when it is negative. You certainly need a fair amount of focus and tenacity when developing a product, but not if this prevents you from addressing customers’ actual needs and wants.
TIP: Request product feature feedback from potential users (don’t ignore negative feedback!) then determine whether or not your marketing messaging resonates with them. If not, it’s time to go back to the drawing board.
Prolonged Product Launch
According to the Center for New Product Development, the average new product development project exceeds its schedule by 120 percent. However, if a company takes too long to launch a new product, this can spell disaster. Perhaps customer needs have changed or the market itself has evolved. Or, the entire economy might have experienced a downturn (like we’re currently seeing due to the COVID pandemic). Any of these variables can be contributing factors that explain why most products fail because they mean lost revenue and market share.
TIP: To launch on time, you must understand 1) the competitive landscape and 2) the customer’s unmet needs in the market where your product must perform — then be able to address the latter as cost-effectively as possible. Additionally, working with an experienced product development firm will help to both reduce the number of product changes and to make better decisions, faster.
Products Don’t Deliver on Their Promise
If a company makes bold promises about a product but it falls short when in the hands of the consumer, its performance on the market will suffer. There are a number of ways a product might disappoint its end user. Perhaps the product is a victim of bad design, or maybe there was a lack of quality control throughout various stages of development and manufacturing, resulting in significant defects.
TIP: Do not overpromise and underdeliver. If consumers are guaranteed your product will address a specific problem, they will expect it to perform.
Lack of Internal Capabilities
When the development team for a new product doesn’t possess the skills and resources to develop products that meet real customer needs, it’s highly unlikely that product will come to life in a meaningful way. Think of it this way: if you have a weak team, then you will have a weak product.
TIP: If your internal capabilities are lacking, consider outsourcing product development to a robust team that is well-equipped to handle challenges that may arise at any stage of the process.
A Poorly Executed Product Launch
Whatever the product being launched, it usually requires substantial promotion and access to the appropriate channels needed for distribution. However, when launches lack effective marketing effort or have a limited budget, this is another major reason why most products fail.
TIP: Don’t under-fund your marketing efforts. Build a team experienced in your industry, with the connections needed to activate a new channel to market.
Want to Test Your Product Idea?
If you’re unsure that your product idea is a good one, we offer a fast, low-cost option to test it. Our four-step process helps you determine whether or not your product can be successful in the market. The Idea Tester system first walks you through how to both describe the problem your idea solves and define your idea (without exposing your IP). Next, we help you define your target buyers. Then, we survey targeted groups and analyze the data, providing this research to you via a detailed report. Lastly, our team presents this report — and recommendations for next steps — to you via a video call.
Contact us to learn more about this service and how it can improve your odds for success.