The vast majority of new products introduced to the market every year end up failing to gain traction in their particular niche. There are many analytical terms devised to explain exactly why a product failed but the most common reason is that, simply stated, no one wanted the product.
Failure is just as much a part of life as it is a part of the product development cycle. And just like in life, many lessons can be garnered from failure. The best product development lab has failed many times; it was necessary in their path to success. Let us look at the top reasons why product development fails.
No One Wants To Buy The Product: Building a product that successfully meets a market demand is difficult. To do it in a way that makes money is even more difficult. Demands are constantly evolving in response to new cultural trends and new technologies. A product that may have been viable 5 years ago may fail now. In 2017 3M projected that 40% of its revenue would come from products that did not exist five years ago. Product timing can be extremely important and is a common source of product failure.
Failure To Define Customer: This is another large source of failure. Building a functional product is one thing, but outlining exactly who will buy the product is an entirely different challenge. Many products have failed because, even though they worked, they did not have a customer base.
How a company treats customer feedback is a related topic. It’s possible to listen too much or too little to customer feedback. On the one hand, a company can get feedback from just about anyone in regards to a product. That does not mean that those individuals are people who, even though they may give their opinion on a product, are likely to buy it. Conversely, listening too little to customer feedback can lead to failure as well. If no one wants a product it is important to know why.
Knowing what customer feedback is important stems from an organization’s ability to identify exactly who is most likely to buy their product and collect feedback from these individuals.
Lack Of Experience In The Development Process: Development costs resources. Knowing how to best allocate resources during development is extremely important. It is not uncommon to have a team that, although technically is very gifted, is poor at resource management. Many product developers find they have run out of money before the first prototype is produced.
Knowing how to build something and knowing how to manage a project and the available resources are entirely different skills.
Poor Marketing Strategies: Even if a customer base for a product is well defined if they do not know that the product exists they will not buy it. Market penetration can be very difficult, an organization has to convince consumers that their new product will fill their needs better than any product they currently use. Knowing how to reach these people as well as knowing how to effectively deliver this message is not a simple process and has caused the failure of many products who likely would have succeeded had consumers been more aware of its existence.
