Contributed By Dave Daniels of BrainKraft
The devastating impact of the 2020 pandemic will have a long-term effect on all industries, but especially the building materials industry. Innovation is the mother of invention, and it has accelerated since 2020.
New building materials products are being introduced at a higher rate than ever before.
Some of this is driven by disruptive innovators and some by new materials like 3D-printed graphene, aerographite, or bioplastic.
These new innovative materials foster new thinking in building materials which will result in unique new products. Along with the risk of developing new products is the risk of bringing those products to market. Launching a new product in the building materials doesn't happen as often as in other industries like high technology, where change is a constant.
You can reduce the risk of introducing a new product by avoiding a set of common launch mistakes. The overarching context is the nature of the building materials value chain: it's risk-averse. Change is slow and careful.
The risk of changing is real and can have significant financial impacts on product creators, product distributors, and product consumers.
1. Assuming Customers Will Love Your Product
There is no problem with falling in love with the products you carefully built. You should be proud of the work of your team. It's essential to be optimistic and aspirational, but not at the expense of ignoring apparent headwinds.
The problem is when you assume the market will be as love-struck as you. You hear things like "How could we lose?" or "Who wouldn't want this product?" or "Maybe we're underestimating market demand for our amazing new product?". It's called "happy ears.
Remember this: customers don't buy products, they buy solutions to problems. That includes everyone in the value chain from your company to your distributors.
Avoid this mistake by compiling performance proof points, getting key customers to sing the product's praises, and getting industry influencers to recommend it.
2. Failing to Prepare Your Organization for a New Product
Assume the last time you launched a product was five years ago. The product is now thriving and generating profitable revenue. The first year or two was likely rocky until you got manufacturing, distribution, and customer support issues under control. Now it's time to do it all over again.
A new product impacts every functional area of a business. Much energy is on designing it, testing it, and manufacturing it. That's roughly one-third to half of the battle. Next comes the tricky part.
The product must be promoted, sold, delivered, and supported. And let's not forget the often overlooked part like pricing, packaging, legal issues, and accounting issues. Your channel will look to your leadership to prepare them, not the other way around.
Avoid this mistake by identifying readiness gaps across your organization. Don't assume a group can do what you need them to do because they said they could do it. Define acceptance criteria to prove they can do it.
3. Underestimating the Obstacles to Success
Successful companies become complacent. They develop blind spots to genuine obstacles, and those obstacles appear when new products are launched.
Adoption is a metric used in the software industry to measure the uptake of a product. It's the post-purchase metric that matters the most. It's an early warning indicator that a new customer is using the product and is likely to continue using it.
The rate of adoption is an often overlooked obstacle to success. When a customer buys a building product for one project and doesn't use the product again, is that a measure of success? I would say it's not.
Avoid this mistake by listening to the concerned voices on your team. Treat their input as valuable even when it's contrary to conventional wisdom. Get a realistic assessment of the obstacles and put plans in place to remove them.
4. Inflating Your Advantages
Successful companies can develop an aura of invincibility. This aura inflates the advantages they believe are theirs and theirs alone.
Your advantages are only those that exist in the minds of your customers. When they believe it's an advantage, it's an advantage. Otherwise, it's not.
Avoid this mistake by validating your assumptions of what you believe to be advantages with potential customers of your new product. Remember that the advantages you have with one product don't automatically convey to a new product.
5. Underestimating the Competition
Your competition isn't just the companies that offer a product like yours; it's anyway a customer can solve their problem. That sounds a little esoteric, but there is typically more than one way to solve a problem. Instead of a new, unproven product, your customers may choose a proven one.
Unfortunately, price is the fallback position when the competition is unknown. A lower price is not a sustainable strategy unless your entire business is based on everyday low prices (like Walmart). In a typical low-price business model, every part of your organization is squeezing out cost in any way possible.
The point is that when you lower prices, your competitors will respond in kind. If they are bigger, they can force your hand and force you no choice but to stop selling your product.
Avoid this mistake by getting a realistic view of the competitive landscape of the target markets for your new product. Know your competitors before you encounter them. Know when you can win and when you can't.
6. Assuming Early Success is a Sign of Future Success
It's common to get an initial rush of customers for a new product. These customers are often involved in designing and testing a new product, so they have a vested interest.
The mistake is assuming all potential customers share the enthusiasm of the early customers. They won't initially, but hopefully will over time.
Avoid this mistake by placing less importance on the first round of new customers. Look for interest and pipeline growth from a wider audience than the early adopters.
7. Not Adapting to the Preferences of a New Market
Different markets have different preferences in how and why they buy. Even buyers in different functional areas within the companies you already serve have different preferences.
A new product could target an unfamiliar market of buyers. It's never wise to assume the new market will buy in the same way or in the same rhythms as familiar markets.
Avoid this mistake by assuming buying preferences in a new market are different until proven otherwise.
Spend time with buyers to learn their preferences, motivations, and buying criteria before selling to them.
8. Relying on Existing Channel Relationships to Reach New Markets
Channel partners have different preferences and motivations, just like buyers in different markets have different preferences and motivations. Assuming that existing channel relationships can reach the target customers for your new product could be a miscalculation.
Channel partners may say they are on board and willing to take on a new product but may not have the competencies to execute on their commitment.
Avoid this mistake by understanding the motivations and preferences of a target market first. Then determine the path to reaching and influencing your target customers. Evaluate your existing channel relationships to determine if they are the best route to the customers you want. If not, develop new channel relationships that will.
About the Contributor:
David Daniels is the Founder of BrainKraft, and is a go-to-market expert who can help you plan and execute a product launch that gets the results you want.
Editor's Note: This article comes to us courtesy of the Contributor above. The opinions expressed therein are not necessarily our own at ManoByte's, nor have we been paid by the Contributor to publish this article. We find the contributor's perspective in the Building Materials Manufacturing space interesting and are happy to share their perspective with you all too.