The Three Big Reasons New Products Fail (and How to Avoid Them)

by Howard Tiersky

As your organization takes its place in the digital transformation that’s underway everywhere, you’ll inevitably need to create or update a large number of different products. But just because you think your shiny new app, website, service, or other digital offering is great doesn’t automatically mean the customer will. According to Nielsen, 85 percent of new consumer products fail in the marketplace.1

Yours doesn’t have to be one of them. Just make sure your “solution” isn’t less desirable than the problem you’re trying to fix.

Sometimes what seems like a great idea just doesn’t resonate with consumers. The problem is you can spend a lot of money on an innovation that unintentionally detracts from the customer experience rather than improving it.

Back in the early 2000s, I moved my business into a shiny new skyscraper in Times Square. That building had a keypad-controlled elevator. Instead of “calling” your elevator and having to pick a floor once you got in, you used a numerical touchscreen that you had to touch only once.

To request an elevator, you typed the number of the floor you wanted to go to, and received a response from a screen with the letter of the alphabet corresponding to the elevator to which you had been assigned. You went to “your” elevator, and when it arrived, you got in and it automatically took you to your floor. Presumably this got you there faster.

Maybe so…but people found the new system extremely confusing and off-putting in other ways. For instance:

  • If you were already in the elevator, there was no way to change your mind without getting off on the wrong floor and repeating the process.
  • Even if you didn’t change your mind, you didn’t like feeling that you couldn’t. You were locked in a metal box that was taking you to one place, and you felt powerless.
  • Frankly, you just didn’t want to relearn a skill you had already mastered—knowing how to work an elevator—(even though it took only 30 seconds).

It’s not that people are unwilling to learn new things. We’re happy to learn to use iPhones and Kindles. But these devices delivered enough value that it justified the investment to learn them. The keypad elevators didn’t deliver enough value to overcome the pain of change—and this is why they haven’t caught on in a major way (though they are still found in some very large buildings). In fact, one office building in Houston went so far as to remove these “smart” elevator controls and revert to the “old-school” form due to so many tenant and visitor complaints.

The good news is that there are specific methodologies to massively reduce the likelihood of this outcome (like Design Thinking). For now, though, let’s focus on a few of the big reasons new products fail.

Reason #1: The Wrong Value Proposition. For a product to be successful, it has to meet customers’ needs and do so in a way that is “worth” more than the cost the customer is asked to bear. Furthermore, it must offer value that is superior to competitive options at that price point. This “value proposition” is the core of any product idea—a specific solution to a customer problem delivered at a defined price point and revenue model.

The quality of a Skype call may not be the same as expensive teleconferencing equipment, but it’s free. So, for many customers, it’s a more compelling value proposition. Of course, other customers prefer to pay more and have more reliable connections. That’s fine as well; both are valid propositions and address different markets.

The “right” idea for a successful product is one that will resonate with its intended customers, be worth the cost, and be either better than the competition or cheaper. Ideally, both. How do you find it? Understanding your customers’ unmet needs, pain, or problems is the starting point. But some solutions may work well for the customer, while others might just not be worth the trouble, like the numerical elevator keypad.

Reason #2: Failure to Execute. It’s not enough to have an idea with the right value proposition, because ideas are not products. You still have to bring them to life. Many products born of great ideas fail in their execution. Take the beloved 2017 Galaxy Note 7 smartphone. Even though it launched with rave reviews, Samsung’s valuation dropped by over $26 billion when the phones’ batteries started catching on fire. The point? Some products just don’t work quite the way they are supposed to.

My team was brought in to help “save” a project management software tool that a client had launched. They built what they thought was a “killer” app, but the market was rejecting it. We conducted some market research and found that while the tool had awesome features that aligned with what customers wanted, it had one problem: It was slow. It required so much computational power that each change to your project plan took 5-10 seconds to “recalculate.” That was all it took for users to reject it. This is a big challenge of product development: A lot can be right, but if one critical thing is off, it can tank the whole thing.

We improved the project management software in part through performance optimization but mostly by removing features that weren’t “worth” their impact on speed. After that the product was more successful.

Reason #3: Lack of Awareness. You know the old adage (attributed, perhaps falsely, to Ralph Waldo Emerson) about building a better mousetrap and having people beat a path to your door? It’s not true. There have been 4,000 patents for new ideas for mousetraps, and yet the world continues to use the classic (grisly and dangerous) “snapping” model. Despite the fact that this customer journey has many points of pain—from the need for insect-attracting peanut butter to the disturbing front-row view of a dying mouse—none of those new designs have overshadowed the original model. Even if an idea is well executed, it can still fail if nobody knows about it.

Awareness does not just mean customers knowing your product exists. It actually consists of three critical components:

  • The product’s existence and core value proposition.
  • The product’s claim of differentiation. Why choose this one over all the other options?
  • How to take action—where to order the product and how to access it.

In “old-school” product development thinking, you’d consider these marketing issues. But if you embrace a Design Thinking approach, you realize you can’t split them out that way. Every stage of the customer experience must be considered together.

By no means are these three obstacles insurmountable. When you address them head-on, you’re all the more likely to launch a highly successful product.

Howard Tiersky is the author of the Wall Street Journal bestseller Winning Digital Customers: The Antidote to Irrelevance. He has been named by IDG as one of the “Top 10 Digital Transformation Influencers to Follow Today.” As an entrepreneur, he has launched two successful companies that help large brands transform to thrive in the digital age: FROM, The Digital Transformation Agency and Innovation Loft. His dozens of Fortune 1000 clients have included Verizon, NBC, Viacom, Avis, Universal Studios, JPMC, Crayola, Morgan Stanley, Condé Nast, the NBA, Visa, and digital leaders like Facebook, Spotify, and Amazon.

Prior to founding his own company, Howard spent 18 years with Ernst & Young Consulting, which then became part of Capgemini, one of the world’s leading global consulting firms, where he helped launch their digital practice.

Howard speaks regularly at major industry conferences and is proud to have been on the faculty of the NYU Tisch School of the Arts, his alma mater.

Winning Digital Customers: The Antidote to Irrelevance (Cranberry Press, January 2021, ISBN: 978-1-73455-853-1, $27.99) is available from Amazon.

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