Why do you get up in the morning?
When 80% of what you do will fail
This is what we are told about your success chances for the next new product. There seems to be a comfort in applying the 80/20 rule to retail marketing even though it often flies in the face of the facts. But would you really get out of bed for a 20% chance of a good day?
Argumentum ad populum (Latin: an argument to the people) is the logical fallacy that if a lot of people believe something, then it must be true. Generations of politicians reach, and hold on to power by understanding that it’s not the facts that matter, it’s the beliefs. So lets look at the facts.
In 2001 Schneider in conjunction with Boston University researched 91 significant companies – with revenues over $2.6 Billion about the recent performance of launches. The respondents reported that 58% of the products hit 8,9 or 10 on a scale that ranged from an overwhelming success to a dismal failure. The study called these Highly Successful launches.
What this means can be gauged from the fact that 71% of these reported that they had bettered forecasts. So if we were simply to take a simple, on forecast or better measure, you are looking at a very simple 41-50% success rate. They then went on to look further at the reported drivers for success. If you take out all of the planning and just focus on the Marketing they said;
- Focus on the consumer to improve success
- Gaining Shelf Presence and distribution are Key
- Spend money on products that are “new”
Interestingly they also said “Don’t put your CEO in charge of the launch!”
Would you get up in the morning for a 20% chance of having a good day? Now you don’t have to.
However, there are a myriad less important new products that companies launch as range extensions that they creep onto the shelves. They take up important shelf space from other variants that need it (certainly promotionally). They bleed time and attention from executives, and investment from the real successes.
You need to treat even range extensions as new products, and give them the attention they deserve to make sure they reach their targets and become an active part of your range – even if this means removing products that have failed.
The real price of failure is the products that get removed when you launch new ones. The ones that, quite possibly, were never given a chance in the first place as they were simply “drifted” on to the market.
Best to make sure, then, that your products are not amongst them.
There are 3 key hurdles you absolutely need to overcome, store and consumer.
They require coordinated sales and marketing action right down to store level. They all actually MAKE money.
Almost no-one hits all the targets. Do you?
For your free book, and a chance to get a performance check on your product launches Click Here
PS Check out Chapter 4 and the Rumsfeld effect, Chapter 7 – In Place of Price and Chapter 8, The Long and Winding Road.