Success

Successfully Launching Your Product: Getting It Right AMEETA SONI and HARRIET COHEN Ameeta Soni is chair of the MIT Enterprise Forum of Cambridge, Massachusetts, and founder, president and CEO of Aanza, Inc., providing product lifecycle management software and consulting services. Harriet Cohen serves on the Board of the MIT Enterprise Forum of Cambridge and is the founder and CEO of Business Topology, providing software tools that maximize the ROI of a company’s investment in engineering. Every company wants to launch the “right” products in the market quickly and retain loyal customers for a long time. So why is this so difficult for most companies? Often, product launch failures are due to such fixable factors as:     

Poor understanding of user needs. Lack of competitive analysis. Lack of understanding of regulatory or channel issues. Lack of up-front planning. Poor cross-functional communication

Instead, launching products that meet customer requirements and are competitive in the marketplace requires opposite actions and preparations:   

A keen understanding of customer needs and competition. A robust product development and launch process. Effective internal preparations for a successful external launch.

Successful companies achieve such requirements by learning as much as possible from each product development and launch activity, enabling them to eventually build a portfolio of offerings, with a high ratio of very successful products. In a marketplace in which 75 percent of new products fail, the good news is that such dismal success rates can be measurably improved by carefully focusing on the customer’s needs. In this way, success in the marketplace increases as products enjoy higher-thanaverage market acceptance. Specifically, launching products that meet customer requirements and that are competitive requires systematic attention to the following areas: UNDERSTANDING THE MARKETPLACE It is important to step back and genuinely and fully understand the customer needs so as to become customer-centric rather than product-centric. Customer needs are often not what customers or potential customers articulate they want in terms of specific product functionality. Instead, it is important to use a keen understanding of customers and their workflows to discern these needs. Some examples of “customer-centric” issues to assess include:          

Who are the target customers? What are the current challenges facing customers? How are these customers currently addressing such problems? Have these approaches been working? How are the customers’ business processes changing? What about other markets or applications? How are the needs of these potential customers different? What are the buying processes and drivers? What are the customer constraints – technology, resources? What is the current channel used by these customers for similar products?

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Customer information of this sort can be obtained both directly and indirectly. If directly, marketers assess customer processes and needs, and fit these with existing or proposed products. There are other ways, too, of capturing customer knowledge. Customers often call into a company’s call center to express their problems and what they like or don’t like about the company’s products. Warranty claims also provide input into the product planning process. Salespeople, too, often hear from customers about product functionality. Additional information on external factors (e.g. government legislation affecting customer needs) should also be taken into account. Competitive analysis addressing current and future product features/benefits, price, quality, market acceptance and technology by the vendor further hone a company’s product planning, development and launch. Since the product definition and launch phases can often be separated by extended periods of time, it is important to stay abreast of all market, customer, product, and channel issues throughout the product development and launch phases. A ROBUST PRODUCT LAUNCH PROCESS Well-defined and well-applied processes for communication, product development and launch allow for timely integration of input from all of the key stakeholders across the organization, and enable timely decisions at the different stages of the product lifecycle. Good processes include sharing of lessons learned and best practices. Technology refers to development of the appropriate expertise in each of the cross-functional areas through effective use of information technology. Applied wisely, it will result in smooth collaboration across the product development team both within a company and with customers and partners. Timely cross-enterprise collaboration is therefore a critical factor for getting the right products to market on time. Over the years, companies have started to apply structured processes for product launch. Each phase contains a set of prescribed and concurrent activities, incorporating industry best practices. It is important to keep the launch requirements in mind at each stage of the product development process to make sure there are no rude surprises at launch. In addition to a robust product launch plan, the key to a successful launch is good old execution – which is where the organization comes in. Each function provides valuable perspectives. These combine market experience with the benefits, costs and acceptability of one approach over another. It is useful to break up the project into steps, some of which can be outsourced. These external resources are typically marketing agencies and can include consultants. Collaboration between all of the launch team members – both internal and external to a company – becomes critical in launching a successful product. The key is to use collaboration tools across the entire product development team to ensure quick response and participation by the entire team. Implementation of a system to provide real-time alerts for these types of problems, coupled with facilitation of this communication process, will go far toward improving the overall efficiency of product development and accelerating the time-to-market. It is important that the launch team members are aware of changes in product functionality and availability real time to avoid any surprises at launch time. Right after concept development, it is important to determine if this product is similar to existing company products in terms of applications, target customers etc, so it can be launched in a similar manner. If it is different from existing company products but similar to other competitive products in the market, there may be elements of the launch strategy for those products that can be incorporated in the launch of this new product. Even if the product is totally new or addressing new applications or target markets, there may be some elements of the existing launch process that can be used. It is important to review the issues at the beginning, mid-point and end of development to assess how a change in product functionality or schedule can affect the launch. The launch plan needs to address some basic issues such as:   

What are the launch goals and strategy? What are the requirements for launch success e.g., targets for sales to key customers and overall revenues in Year 1, gross margin? Who are the major players and stakeholders? Does the launch team include cross-functional expertise from internal marketing group, external marketing agency, sales force, and channel and does this map with the needs of the product launch?

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What are the key milestones for internal and external components?

Internal milestones involve readiness of documentation, pricing, demos, collateral, product training. External milestones include press and analyst meetings, ad and market agency deliverables, trade show timing, etc.   

How will the product introduction be communicated? What will be the launch metrics? How will the best practices be captured for future product launches?

It is useful at this point to go back to questions asked at the beginning of the product development process.          

Who are the target customers? Are they customers of existing similar company or competitive products? Are there different products in the market accomplishing the same results as the product to be launched or is it a new product altogether meeting unmet needs? What are the pain points and unmet needs of the target customers? Have these changed from the beginning of the product development cycle? How are customers currently addressing such problems? Have these approaches been working; if not, then why? Who are the competitors and what is their value proposition? If there are similar competitive products in the market, what aspect of product functionality and application has been most successful? How is the product going to address these pain points and benefit the customers? (This value proposition provides the compelling reason to buy.) How will the value proposition for the customers and the world at large be best communicated? What are the current and projected buying processes, drivers and channels? What are the customer constraints – technology, resources, money? What is the current market environment?

These types of questions define the best way of reaching one’s target customers and communicating a message most relevant to them. It is important to ensure that the product launch schedule is in synch with the overall product development schedule and there is a mechanism for making sure that slips in schedule are communicated to entire team real time to enable trade-off discussions. Truly successful product launches are based on strong internal preparation. It is critical to carefully design a launch plan and prepare internally before a public launch. This internal preparation will address issues as product testing and validation, pricing, documentation, warranty, demos, sales tools, training for sales/channels/service/support, etc. CRITICALITY OF PRODUCT TESTING AND VALIDATION Product testing includes both internal and secondary (“beta”) testing and is important for validating the product functionality, documentation, training and support services before external launch. It’s a step that, when overlooked, often results in a failed launch. It includes preparation of test plans, testing, and issue tracking during manufacturing ramp-up and release. Key to the success of a beta test is finding good sites – those that will use the product rigorously in different scenarios in a timely manner, will openly share the information with you, and be willing to serve as references for you in the future.

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A product under development is ready to move into the beta phase when the engineering development work is complete and the product has received enough initial (“alpha”) testing to ensure that the product performs its essential functions correctly and without serious failures. The beta test is an important component of the activities of this phase, though far from the only one. Other important aspects of this phase include training for sales and services, ramping of manufacturing, preparation of collateral materials, and the creation or updating of legal documents such as license agreements. More on the beta test in a moment, but, first, what beta test is not. It is not the time to find out whether you have built the right product. If you wait until the beta test to gather customer feedback on the product and you discover the product does not meet the needs of your target market, you have wasted a substantial amount of effort. Companies who are successful at building products that the markets demand solicit customer input at every stage in the product’s development. Similarly, beta test is not an early sales program. It may well be a good idea to have one, but it is different from beta, and must be run differently. Finally, beta test is not an opportunity for continuing engineering development. Engineering organizations, which are running late on their schedule and are under pressure to meet the delivery date may succumb to the temptation to make an unfinished product available for beta test. Because the product is not complete and often has flaws that should have been detected in alpha test, the beta test is inevitably prolonged and the end date suffers. What a good beta test does do is stress every aspect of the product, from the product features themselves to the documentation, to service and support, and on manufacturing processes. A good beta test finds and corrects flaws in function, performance, and process. Work to create a good beta test begins early in the product development phase. The first task is to develop a checklist of tests that the beta sites will need to perform. Each site does not need to perform every task, but every task must be performed by at least one beta site. Finding good beta sites is difficult and time-consuming. The beta site must commit to spending personnel time in testing the product and reporting the results (and who, these days, has people sitting around waiting to do extra work?). They may also have to commit computer or other resources. Product discounts, opportunities to work directly with the product engineering group, and other incentives will need to be considered – and then, experience shows, about half the sites that promise to test the product will fail to open the product package, so be sure to recruit more beta test sites than you will need to test the product. Once you have selected your beta site customers, it is a good practice to have them sign an agreement, which details (a) what the product will do, (b) the rights being granted to the customer, (c) confidentiality provisions (typically, beta site customers agree not to reveal any information unless asked to do so by the company), (d) what the company will do for the customer, for example, level of support, and (e) the time period of the test and termination provisions. The agreement typically also reinforces an important point: that the product is provided “as is” and that it may not operate as described and that performance may not reach target levels. The beta test period is also an opportunity to train and prepare customer support personnel. Rather than having an engineer or a product manager take calls from the test customers, they should be routed through the same technical support people who will provide support later. This may require setting up a special toll-free line: it will most certainly require training the personnel who will be taking the calls. This should take place a few weeks before the test start. That will not only enable the support staff to take the calls, it is another opportunity to have an informed set of users test the product in a controlled environment. Documentation is a key part of the product and should your beta site personnel should vet it. Documentation includes both online help files for software products and paper documentation. The beta testing of documentation means that the documentation must be ready for customer review by the time that beta begins. This means that the documentation must be written during the development phase of the product, and prepared to ship with the product, allowing time for reproduction of paper documentation. You should be clear with your customer that you are seeking his comments not only on the product itself but also on the documentation that accompanies it. As far as possible, products should be manufactured through the same process that will be used when the product is in full-scale production. For software, this may only be the stamping of a CD, but if the product is typically downloaded from the web, then the beta test should include downloading in the same manner. For tangible items, the manufacturing is more complex, and a count of beta site units will need to

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be available with enough lead time that manufacturing can order parts and manufacture the product, another good reason to identify the beta sites early in the process. It is always tempting to treat the beta manufacturing cycle as an offshoot of the standard process, but there is no better way to ramp into production than to find the bugs in the manufacturing process during beta test. While the test is in progress, it is important to keep in contact with the customer. Everyone is busy, and conducting the test for you is probably not his or her top priority, and it is easy to let the testing slip. A weekly or bi-weekly conference call will help prevent that from happening. Typically, the product manager, engineering representatives, and marketing staff join the call from the company end. This is a good opportunity to work through the checklist that was prepared as the first step in beta planning. This is also a time for the customer to provide feedback usability, performance, and reliability, and a time when the customer can tell you whether the product has met expectations. The customer should be encouraged to report feedback on every aspect of the product, whether a bug or a concern about performance or a problem with the documentation or packaging. It is critical to resolve customer problems and to make sure the customer is aware of the resolution. “Resolve” does not necessarily mean “fix” or “change.” It may not be possible to fix some problems, and one customer’s input on, say, usability, may be very different from the feedback from the other beta sites. “Resolve” does mean that a decision is made as to whether to fix a problem or implement a customer suggestion. The customer needs to be informed of the outcome, whatever the decision. There is no surer way of losing a good beta site than to fail to respond to the customer’s input. While the customer may not be happy to hear that the problem is not being fixed, the customer would rather be informed than ignored. And if the customer feels ignored too often, he or she will stop giving input. As the testing draws to a close, the number of problem reports, both internal and external, should drop off sharply. If they are high, the test should be continued; the product is not ready to ship. The producttesting list should be reviewed, and it should be verified that all aspects of the product, which needed testing, have received and satisfactorily completed it. When all of this is done, the product is ready to ship. The beta phase is not simple nor is it easy. It takes a lot of work from a variety of people, and it requires forethought, planning, and careful execution. The payoff from this hard work is a successful launch and satisfied customers. OTHER INTERNAL PREPARATION A number of internal logistics need to be addressed prior to the external launch. Pricing structure for direct and channel sales should be put in place early on in the development cycle. Expected revenues based on these prices guide the development in terms of project and product costs. If this is a new product altogether, the pricing structure may well have to be tweaked based on market feedback. Product demos, which enable demonstration of the way potential customers would use the product, not just of the technology, can be a powerful sales tool. Product literature and sales training (both company and channel), should be customer centric i.e., reiterate the pressing need for this new product in light of problems customers face, show how the new product would benefit the customers, and demonstrate the return on investment that customers can expect. This type of approach can “sell” far better than extensive information about the product or its technology. The warranty terms should be clearly defined and product support team trained on the product and its potential applications, so they can truly assist the early customers. BETA CHECKLIST Approximately three months before the beta test:  Prepare beta task list (features to be tested by the end user).  Prepare beta test agreement and have approved by legal staff.  Select beta sites.  Develop manufacturing plan for beta units. Approximately one month before the beta test:  Train service personnel who will support the beta test sites.  Perform final review of documentation.

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Make final installation arrangements with customers. Make travel arrangements for anyone flying to customer site.

Approximately one week before the beta test:  Send hard copy documentation for production.  Final internal test of the product.  Prepare beta unit for shipping (if not software).  Confirm arrangements with the customer. During beta test:  Weekly or bi-weekly conference call with customer and support personnel.  Resolve all customer problems and report resolution to customer.  Provide updates as needed.  Ongoing training of sales and service.  Bills of material finalized and manufacturing ramped for production.  Order entry systems prepared.  Regulatory testing completed.  Export paperwork. COMMUNICATION The communication phase involves developing the product positioning and message and then choosing the best means to communicate and create interest in it. In addition, the communications plan addresses the budget and timeline. Feedback from other members of the product development team, channel and customers (advisory board, beta customers…) is integrated with the communications plan. In designing the communications plan, some considerations are:  Does the product positioning open up new markets for the company?  Does the product require the target customers to change how they work or buy the product? If so, these customers need to be educated on the benefits of these changed ways of working or buying.  What will the product sales cycle be? Will it be similar to or different from prior company product launches?  Who are the primary and secondary decision makers and channels?  What are the primary drivers and influences for the purchase? Will the product be bought on benefits, FUD (Fear, Uncertainty, Doubt) or ROI (Return on investment)?  What are the performance expectations and in what timeframe?  Where and how do the target customers find out about new products e.g., publications read, trade shows visited, propensity to attend seminars or webinars? Product interest is stimulated through meetings with press, analysts, and other opinion leaders, press releases, trade show appearances, direct and email campaigns and advertisements. It is useful to ask these questions at the beginning, middle and end of the product development process and modify the launch plan accordingly.

POST LAUNCH REVIEW A post launch review provides for learning from the launch in an effort to improve the subsequent launches. Was it successful? Why or why not? What was the actual performance vs. the target? The performance can be measured across various areas e.g., financial (sales, margin, investment, product cost, price, forecast, ROI), timeline (breakdown by each development phase) and distribution (accounts and channels).

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The data can help delineate the best practices for future product launches. It is important to include marketing, marketing agencies, suppliers, engineering, manufacturing, sales, senior management, channel management, and customers in the post-launch review to get a cross-functional perspective. SUMMARY The key to a successful launch is a robust and comprehensive process that starts with product definition and runs in parallel with the product development process. This process should demonstrate:    

Keen understanding of customer needs and competition. Effective collaboration between internal resources and external customers, partners and suppliers. Comprehensive product validation and testing Effective internal preparations for a successful external launch.

The smartest companies make a distinct effort today to build a knowledge base of all product launch efforts – analyzing what worked and what didn’t. This enables product launch teams to function at top efficiency by keeping them from re-inventing the wheel. To develop products that are successful in today’s marketplace, organizations also have to realize that their products have a finite life, and as a result they must take care to deploy their scarce resources with discipline and agility. Fortunately, software applications that enable companies to address product lifecycle processes are now available. However, to maximize effectiveness of these systems, leaders of organizations must also cultivate and maintain the right cultural environment in their companies to ensure timely collaboration to support product planning, product development and product launch efforts. 

Customer needs are often not what customers or potential customers articulate they want in terms of specific product functionality. It is critical to carefully design a launch plan and prepare internally before a public launch. Companies, which are successful at building products that the markets demand, solicit customer input at every stage in the product’s development. To develop products that are successful in today’s marketplace, organizations have to realize that their products have a finite life.

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