Why Most Product Launches Fail

As partners in a firm that specializes in product launches, we regularly get calls from entrepreneurs and brand managers seeking help with their “revolutionary” products. After listening politely, we ask about the research supporting their claims. The classic response? “We haven’t done the research yet, but we know anecdotally that it works and is totally safe.” We’ve been fielding these calls for so long that we can often tell from one conversation whether the launch will succeed.

Most won’t. According to a leading market research firm, about 75% of consumer packaged goods and retail products fail to earn even $7.5 million during their first year. This is in part because of the intransigence of consumer shopping habits. The consultant Jack Trout has found that American families, on average, repeatedly buy the same 150 items, which constitute as much as 85% of their household needs; it’s hard to get something new on the radar. Even P&G routinely whiffs with product rollouts. Less than 3% of new consumer packaged goods exceed first-year sales of $50 million—considered the benchmark of a highly successful launch. And products that start out strong may have trouble sustaining success: We looked at more than 70 top products in the Most Memorable New Product Launch survey (which we help conduct) for the years 2002 through 2008. A dozen of them are already off the market.

Numerous factors can cause new products to fail. (See the sidebar “40 Ways to Crash a Product Launch.”) The biggest problem we’ve encountered is lack of preparation: Companies are so focused on designing and manufacturing new products that they postpone the hard work of getting ready to market them until too late in the game. Here are five other frequent, and frequently fatal, flaws.

Flaw 1: The company can’t support fast growth.

The Lesson: Have a plan to ramp up quickly if the product takes off.

Mosquito Magnet

In 2000 we worked with American Biophysics on the launch of its Mosquito Magnet, which uses carbon dioxide to lure mosquitoes into a trap. The timing was perfect: The West Nile virus scare had elevated mosquitoes from irritating nuisances to life-threatening disease carriers.
Mosquito Magnet quickly became one of the top-selling products in the Frontgate catalog and at Home Depot. But American Biophysics proved more adept at killing mosquitoes than at running a fast-growing consumer products company. When it expanded manufacturing from its low-volume Rhode Island facility to a mass-production plant in China, quality dropped. Consumers became angry, and a product that was saving lives almost went off the market. American Biophysics, which had once had $70 million in annual revenue, was sold to Woodstream for the bargain-basement price of $6 million. Mosquito Magnet is making money for Woodstream today, but the shareholders who originally funded the device have little to show for its belated success.

Flaw 2: The product falls short of claims and gets bashed.

The Lesson: Delay your launch until the product is really ready.

Microsoft Windows Vista

In 2007, when Microsoft launched Windows Vista, the media and the public had high expectations. So did the company, which allotted $500 million for marketing and predicted that 50% of users would run the premium edition within two years. But the software had so many compatibility and performance problems that even Microsoft’s most loyal customers revolted. Vista flopped, and Apple lampooned it in an ad campaign (“I’m a Mac”), causing many consumers to believe that Vista had even more problems than it did.

If Vista were launched today, the outcome might be even worse, owing to the rising popularity of Twitter and YouTube and the prevalence of Facebook “hate” pages. As social media and user-generated reviews proliferate, the power of negative feedback will only increase—making it even more imperative that products be ready before they hit the market.

Flaw 3: The new item exists in “product limbo.”

The Lesson: Test the product to make sure its differences will sway buyers.

Coca-Cola C2

For its biggest launch since Diet Coke, Coca-Cola identified a new market: 20- to 40-year-old men who liked the taste of Coke (but not its calories and carbs) and liked the no-calorie aspect of Diet Coke (but not its taste or feminine image). C2, which had half the calories and carbs and all the taste of original Coke, was introduced in 2004 with a $50 million advertising campaign.
However, the budget couldn’t overcome the fact that C2’s benefits weren’t distinctive enough. Men rejected the hybrid drink; they wanted full flavor with no calories or carbs, not half the calories and carbs. And the low-carb trend turned out to be short-lived. (Positioning a product to leverage a fad is a common mistake.)
Why didn’t these issues come up before the launch? Sometimes market research is skewed by asking the wrong questions or rendered useless by failing to look objectively at the results. New products can take on a life of their own within an organization, becoming so hyped that there’s no turning back. Coca-Cola’s management ultimately deemed C2 a failure. Worldwide case volume for all three drinks grew by only 2% in 2004 (and growth in North America was flat), suggesting that C2’s few sales came mostly at the expense of Coke and Diet Coke. The company learned from its mistake, though: A year later it launched Coke Zero, a no-calorie, full-flavor product that can be found on shelves—and in men’s hands—today.

Flaw 4: The product defines a new category and requires substantial consumer education—but doesn’t get it.

The Lesson: If consumers can’t quickly grasp how to use your product, it’s toast.

Febreze Scentstories

In 2004 P&G launched a scent “player” that looked like a CD player and emitted scents (contained on $5.99 discs with names like “Relaxing in the Hammock”) every 30 minutes. The company hired the singer Shania Twain for its launch commercials. This confused consumers, many of whom thought the device involved both music and scents, and the ambiguity caused Scentstories to fail.
When a product is truly revolutionary, celebrity spokespeople may do more harm than good. A strong educational campaign may be a better way to go. The product’s features provide the messages to build brand voice, aided by research and development teams, outside experts, and consumers who’ve tested and love the product.

Flaw 5: The product is revolutionary, but there’s no market for it.

The Lesson: Don’t gloss over the basic questions “Who will buy this and at what price?”

Segway

The buzz spiraled out of control when news of a secret new product code-named Ginger and created by the renowned inventor Dean Kamen leaked to the press nearly 12 months before the product’s release. Kamen, it was said, was coming up with nothing less than an alternative to the automobile. When investors and the public learned that the invention was actually a technologically advanced motorized scooter, they were dumbfounded. Ads showing riders who looked like circus performers perching on weird-looking chariots didn’t help, nor did the price tag—$5,000. Instead of selling 10,000 machines a week, as Kamen had predicted, the Segway sold about 24,000 in its first five years. Now it sells for far less to police forces, urban tour guides, and warehouse companies, not the general public. If there was ever a product to disprove the axiom “If you build it, they will come,” it’s the Segway.

 

Some of these problems are more fixable than others. Flaws 1 and 2 are largely matters of timing: If the launches of Mosquito Magnet and Microsoft Vista had been postponed, the manufacturing and quality problems might have been resolved. Even though companies may be wedded to long-established or seasonal launch dates, they would do well to delay if waiting might increase the odds of success. Flaws 3, 4, and 5 are trickier, because they relate more directly to the product itself. Managers must learn to engage the brand team and marketing, sales, advertising, public relations, and web professionals early on, thus gaining valuable feedback that can help steer a launch or, if necessary, abort it. Hearing opposing opinions can be painful—but not as painful as launching a product that’s not right for the market or has no market at all.

http://hbr.org/2011/04/why-most-product-launches-fail/ar/3

The Right Way to Respond to Failure

My wife Eleanor and I were visiting some friends on a Saturday when their nine-year-old daughter, Dana*, came home. She was close to tears, barely holding it together.
"Oh sweetie," her mom said. "What happened at the swim meet?"
Dana is an excellent swimmer. She trains hard, arriving at swim practice by six most mornings and swimming some afternoons as well. And her efforts are rewarded; she often wins her events, scoring points for her swim team. It is clear she is very proud of these wins.
It isn't like that for all her endeavors. She struggles with some subjects in school, doing extra math homework to keep up with the other kids and getting special help with her reading. But she always works hard.
"I was disqualified," she told us. She swam the race well, but dove in a fraction of a second before the starting gun went off: a false start.
We were in the foyer of the house and she sat down on the bottom stair of the staircase, her swim bag still on her shoulder, staring into space, almost expressionless.
"Honey," her dad said, "there are a lot more swim meets in the season. You'll have other chances to win."
I told her, "The fact that you left the block prematurely means you were at your edge. You're trying not to waste a millisecond in hesitation. That's the right instinct. You misjudged the timing but that's OK. The more you do this, the better you'll get at it."
"Every swimmer on every team has been disqualified at some point," Eleanor said. "It's part of the sport."
"I'm sure your coach will help you practice your starts before the next meet," her mom said, "and you'll figure out exactly when to spring off the block so that you don't waste a second but you don't dive too early either. You'll get it."
Nothing we said seemed to have any impact on her. Nothing changed her expressionless stare. Nothing helped.
Then her grandmother Mimi walked over.
We were all standing over Dana, when Mimi moved through us and sat down next to her. She put her arm around Dana and just sat there quietly. Eventually, Dana leaned her head on Mimi's shoulder. After a few moments of silence Mimi kissed Dana's head and said, "I know how hard you work at this, honey. It's sad to get disqualified."
At that point, Dana began to cry. Mimi continued to sit there, with her arm around Dana, for several minutes, without saying anything.
Eventually Dana looked up at Mimi, wiped her tears, and said, simply, "Thanks Mimi." And I thought, every leader, every manager, every team member, should see this.
All of us except Mimi missed what Dana needed.
We tried to make her feel better by helping her see the advantage of failure, putting the defeat in context, teaching her to draw a lesson from it, and motivating her to work harder and get better so it doesn't happen again.
But she didn't need any of that. She already knew it. And if she didn't, she'd figure it out on her own. The thing she needed, the thing she couldn't give herself, the thing that Mimi reached out and gave her?
Empathy.
She needed to feel that she wasn't alone, that we all loved her and her failure didn't change that, She needed to know we understood how she was feeling and we had confidence that she would figure it out.
I wanted every leader, manager, and team member to see that, because the empathetic response to failure is not only the most compassionate, it's also the most productive.
Empathy communicates trust. And people perform best when they feel trusted.
When I sit with you in your mistake or failure without trying to change anything, I'm letting you know that you're okay, even when you don't perform. And, counter-intuitively, feeling okay about yourself — when you fail — makes you feel good enough to get up and try again.
Most of us miss that. Typically, when people fail, we blame them. Or teach them. Or try to make them feel better. All of which, paradoxically, makes them feel worse. It also prompts defensiveness as an act of self-preservation. (If I'm not okay after a failure, I'd better figure out how to frame this thing so it's not my failure.)
Our intentions are fine; we want the person to feel better, to learn, to avoid the mistake again. We want to protect our teams and our organizations.
But the learning — the avoidance of future failures — only comes once they feel okay about themselves after failing. And that feeling comes from empathy.
Thankfully, the expression of empathy is fairly simple. When someone has made a mistake or slipped up in some way, just listen to them. Don't interrupt, don't offer advice, don't say that it will be all right. And don't be afraid of silence. Just listen.
And then, after some time, reflect back what you heard them say, what you feel they're feeling. That's it.
I said simple, not easy. It's hard to just listen and reflect back. It's hard not to give advice or solve a problem. Hard, but worth the effort.
After some time, Dana got up from the stairs, we all had dinner, and then she went to watch some TV.
We were talking in the living room when she came in to say good night.
"How are you feeling?" I asked her.
"OK, I guess." She shrugged. "I'm still bummed."
I almost told her not to worry, that it would be OK, that she would feel better in the morning, that there was always the next race, that she had lots of time to practice.
Almost.
"I understand," I told her. "It's a bummer."

*Names and some details changed