Posted: Tue 27th Feb 2024
When you want to create a product or service, it can be tough to know where to start. Having a plan in place can be useful. Especially as you'll be investing time and money into the process, meaning there's a certain amount of risk involved.
You'll likely have a ton of questions at this point. How can you be sure you have a good idea? How much should you invest in developing it? Will the whole process even be worth it in the end?
No matter how much research you put in to developing your idea, you can't guarantee it'll be successful. But there are things you can do to boost your chances.
Why develop new products and services?
Expanding your range of products or services is a great way to grow your business. By responding to your customers' needs, you can make sure your business is able to stick around for the long term.
Here's how adding to your current range can help you.
Make the most of existing relationships
Maybe you've already invested in things like branding, marketing and nurturing customer relationships. If that's the case, it's likely you have a decent customer base to work with.
By adding to your range, you can make the most of those current relationships. Look for ways to encourage established customers to buy more from you, or use your business for extra services.
You've put the hard work into laying those foundations, so it makes sense to ensure they're fulfilling their potential.
What your customers need and want is changing constantly. Bringing them back to your business means keeping up with these changes. All it takes for customers to leave you is someone else offering something better at a competitive price.
But if you stay up to speed and respond to the changing market, you’ll be able to keep customers satisfied. And that helps with boosting your brand and customer loyalty.
Attract new customers to your business
Developing your offering could help you reach a new set of potential customers. Many people out there likely find your brand relevant and attractive. But perhaps your existing products or services don’t hit the spot for them.
Expand your range and you can appeal to a wider target market. It also means you're relying less on the same group of customers.
Grow your business
In the world of business, if you're not moving forwards then you're retreating backwards. When you develop a new product or service, you're simply creating opportunities to sell more. And that makes your business more likely to see long-term success.
Create more revenue streams
Markets can be hard to predict, so having all your eggs in one basket isn’t ideal. Make what you offer more diverse and you can increase your business's value and reach. You're also less dependent on specific markets or revenue streams.
Read other guides in our Essentials series
Generating ideas for new products or services
You may already have some product ideas in mind. Or perhaps you've worked out how to develop new services. But equally you might know you want to extend your offering without having answered the question of what with.
Either way, it's helpful to go through an idea generation process. This will flesh out and improve your initial concept. If you're yet to have any noteworthy brainwaves, it'll get some mental sparks flying.
Think about your expertise
Which of your experiences or talents could inform your new products? What knowledge do you have that other people might find valuable? What do people compliment you or your business on most?
Here's an exercise you can do to get the creative juices flowing.
Set a timer on your phone for, say, three minutes.
On a notepad, write as many topics, areas of knowledge or experiences as you can.
Don't think too much about it – the purpose is to loosen up your brain and get those ideas pouring out.
Identify gaps in the market
Are you aware of any barriers that stop people accessing your business? Have you recognised any trends that will help you predict what customers will need next?
Have you spotted a successful product or service in another region or country? If so, can people in your area buy them easily enough? These are all great questions to ask yourself when trying to spot a gap in the market that you can swoop into.
Talk to existing customers
Hopefully, you have a good relationship with your customers and they're open with you about what they want. But, to delve a little deeper, you need to do more formal market research.
In the product development process, the "why" is as important as the "what". You could try emailing surveys to your customers. (You may need to offer them something in return, as an incentive.)
Reach out to potential new customers
Understanding why people in your target audience don't use your business is crucial. But it's also important to know why your customers do.
Gather some insights from the customers you want, or hope to attract, to inform your idea generation. Flag any more gaps in the market that this throws up.
Check out your competitors
Look at your competitors or some successful businesses that you admire. What are they doing? What are they not doing? Think about tricks they might be missing or why they seem to be so popular among a certain group.
Use what they've already put out there to help inform your ideas and decisions and make sure you come up with something unique.
Product design and development
Keep a record of all the work you've done so far. It'll be a valuable guide to revisit throughout the next stages. But now you have some ideas to work with, you're ready to build a product or service.
Define the opportunity
Summarise the key points that your research and idea generation processes revealed. Look at the specific areas that are most relevant to your business.
the relevant gap in the market
the appetite for the product or service
the target audience
what a new product or service must do to hit all those sweet spots
Pick your favourite ideas and apply them to the above criteria. Think more carefully about how exactly they'll benefit your business and bring value to your customers.
You are your own product development team. So, take your best couple of ideas and run them past friends, family and customers. Get as many opinions as you can, from a diverse range of people.
Ask how you could make your ideas better or if anyone knows of another company doing something similar. Also check what people would be willing to pay.
Processing feedback can be tricky as you're likely to get conflicting views – you can't please everyone! When sifting through, keep referring back to the aims you set out for your new product and the audience you're targeting.
Test your product
Get a prototype of your product made, or build your service package and test it. (With a prototype, try and do it as cheaply as possible, as you may end up needing several versions.)
Make sure testers know that this isn't the finished article and is still a work in progress. Without this knowledge, they may not be completely honest about what you could improve on.
Try to spark conversations around the prototype as well as asking rigid questions. Get as much information as possible. Some of that might be in people's tone, emotions or sense of interest, as well as their actual answers.
Remember to ask customers what they'd be willing and able to pay for this new product and what they think it's worth. For it to be successful, you'll need to price it right from the off.
Design the packaging
If you're developing a product, you must give almost as much thought to the packaging as to the item itself.
Packaging is crucial to the customer experience. It can convey tons of information about the brand and the goods inside. Consider how it will look on a shelf and how it might fare when grouped with other similar products.
"From the outset, we were always going to make solid, plastic-free haircare products. So, we knew our packaging was going to be a small and simple cardboard box with limited space. And it couldn't be too busy, but the box needed to convey essential information for people to know how to use the product.
"I thought about how to make a product that stood out on a retailer's shelf or on a website. It needed to be eye-catching next to other brands and look like a quality, well-made product."
Calculate the cost of bringing a new product to market
Work out how much it'll cost you to provide this new product or service. Will you need suppliers, extra infrastructure or anything else to help you deliver it? If so, get all the figures you can, so you're clear on the finances.
Then look at the data you collected on what people would pay for it. Research what other similar products are going for elsewhere in the market. Comparing the two figures will give you a sense of whether your product is commercially viable.
Research funding opportunities
Because you've done all this research, you may qualify for research and development tax credits. But launching your product might mean you need some funding upfront. This will become clearer once you've worked out what your product launch will cost.
Decide what amount you'll need, then check out the different options available, from grants and loans to crowdfunding.
"We realised we could use crowdfunding in two ways. First, to get the investment, which is obviously massively important, but also to use it as an opportunity to shout about the brand and about the product.
"The publicity that comes alongside doing a very public raise on a crowdfunding platform was critical. It was certainly right for us."
Refer back to your definition and objective
Now that your new product or service is nearly a reality, re-read the notes from your initial research.
Is this still the product for which you identified a need?
Is it financially viable?
Does it fill the market gap you found?
Your product or service may have changed a lot as you developed it, so just make sure the goalposts haven't moved too much.
Hear Kiddiwhizz founder Zoë Chapman discuss an intense first year in business, which got her from an idea on paper to an award-winning product.
Protect your intellectual property
If you've developed something innovative, think about protecting it as your intellectual property. This means you can take legal action if someone tries to copy it. Learn more about this on the government's website.
Think about product positioning
Positioning is basically a marketing strategy for your new product or service. You'll use all the research you've done up to now, as it'll help you target the right audience.
Get the positioning right and you'll give yourself the best possible chance of making sales. A reward for all that hard work you put in!
You've done all the proper research. You have a great marketing plan. But sadly, there's still no guarantee your new product or service will be the success you'd planned.
So, it's important to establish how you need it to perform to make it worthwhile producing and marketing. However much you believe in it, it's not worth compromising your business for.
So, it’s time to release your new offering into the wild. Time the launch so it can make as huge a splash as possible.
Is it worth holding off a few weeks to make sure you have the right strategy in place? Or, perhaps it needs to get out there ASAP while relevant conversations are happening online.
If you have staff, make sure they know the new product or service inside out. That will help them give customers the proper advice and guidance.