Posted: Wed 23rd Jun 2021
When you want to develop new products or services, it can be tough to know where to start. It’s useful to have a plan in place from the off, especially as you’ll be investing time and money into the process, meaning there is a certain amount of risk involved.
You’ll likely have a ton of questions at the beginning of this journey: how can you assess the likelihood that your new idea will work? How much should you invest in developing it and will the whole process even be worth it in the end?
Unfortunately, no matter how much research you put into the development of your idea, there are never any guarantees – but there are things you can do to boost your chances of success.
Why develop new products and services?
Expanding your range of products or services is a great way to grow and evolve your business. Staying dynamic and responsive to your customers’ needs is key to ensuring the longevity of your outfit and commercial success.
Adding to your current roster of offerings could help you to do the following...
Make the most of existing relationships
If you’ve laid the groundwork of your business already, investing in things like branding, marketing and customer relationships, it’s likely you have a decent customer base.
By adding to your range, you can make the most of those current relationships’ potential, perhaps encouraging established customers to buy more or use your business for extra services.
You put the hard work into laying those foundations, so it makes sense to ensure they’re fulfilling their potential.
Customers’ needs and demands are constantly changing – and it’s important to keep up with them if you’re going to draw them back to your business. All it takes is a better offering at a competitive price for regular customers to start using your business less and less.
However, if you stay up to speed and respond to the changing market, you’ll be able to boost customer satisfaction and therefore reinforce your brand and nurture loyalty.
Attract new customers to your business
Developing your offering could open up a whole new audience. There are likely many people out there who your brand is relevant and attractive to, but you perhaps don’t hit the spot for them in terms of the products or services you offer.
Diversifying your range is a great way to build on your current audience and be less reliant 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 – there’s no standing still in this game.
By developing new products or adding to your roster of services, you’re opening up opportunities for increased sales and nurturing the sustainability of your outfit.
Diversify revenue streams
Markets can be unpredictable, so having all your eggs in one basket isn’t ideal. Diversifying what you offer and how you deliver it can not only increase your business’s value and reach, but also make you less reliant on specific markets or revenue streams. It helps to have fingers in different pies.
Generating ideas for new products or services
You may already have a germ of an idea for a new product or service you’d like to develop. But equally you might know you want to extend your offering without having answered the tiny little question of what with.
Either way, it’s helpful to go through an idea-generation process. It’s what will flesh out and improve your initial concept. Or, if you’ve yet to have any noteworthy brainwaves, it’ll get some mental sparks flying.
Think about your expertise
Mine for any experiences or talents that could inform your new products. Ask yourself what knowledge you have that others might find valuable and what people most often compliment you or your business on.
It might help to do an exercise to get the creative juices flowing: set a timer on your phone for, say, three minutes and write down as many topics or areas you have some knowledge of or experience in as you can in that time. Write at speed and don’t think too much about it – the purpose is to loosen up the 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 picked up on any trends that will help you predict impending shifts in customer needs?
Can you think of any products or services that seem to be popular in other regions or countries but that aren’t yet offered in the area in which you operate?
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, a more formal kind of market research is in order – because the ‘why’ will be as important as the ‘what’ in the development process.
Perhaps try emailing surveys to your customers (it may be worth incentivising them to fill out the forms with offers or prize draws to boost responses). If you’re feeling stumped about what exactly you should be asking, you can find some great inspiration online.
Reach out to potential new customers
It’s just as important to understand why people in your target audience don’t use your business as finding out why your customers do. Gather some insights from potential and desirable customers 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 successful businesses that you admire. What are they doing? What aren’t they 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.
It’s a good idea to keep a record of all the work you’ve done so far. It’ll be a really valuable guide to revisit throughout the next stages.
Speaking of which, now you have some ideas to work with, you’re ready to take the next step and distil these ideas into a new product or service.
Define the opportunity
Summarise the key points that your research and idea generation processes revealed, homing in on the specific areas that are most relevant to your business.
Note down the relevant market gap, the appetite, the target audience and the requirements of a new product or service that will hit all those sweet spots.
Pick your favourite ideas and apply them to the above criteria, thinking more carefully about how exactly they will benefit your business and bring value to your customers.
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. It’s also worthwhile checking 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.
Get a prototype of your product made (it’s a good idea to try and do this as cheaply as possible, as you may end up needing several versions) or put together your service package and try it out.
Make sure testers know that this is by no means 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. It’s important to get as much information as possible, and 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 it’s a product you’re developing, you may need to put almost as much thought into the packaging as you have into the item itself.
Packaging is a significant part of the customer experience and 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 hair care products, so we knew our packaging was going to be a small and simple cardboard box. That meant space was limited, 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 what it would look like on a retailer’s shelf or on a website, imagining it was the very first time someone was seeing our product. It needed to be eye-catching next to other brands and look like a quality, well-made product.”
Work out how much it’ll cost you to provide this new service or product. If you’ll need suppliers, extra infrastructure or anything else to help you deliver this service, get all the numbers you can in terms of finances.
Then look at the data you collected on what people would pay for it and research what other similar products are going for elsewhere in the market. Comparing the two figures will give you a sense of whether it’s commercially viable.
Research funding opportunities
All this research may well mean you’re eligible for research and development tax credits. But sometimes, to get your new product off the ground, you need funds upfront. This will be very clear after costing the new product.
Work out what kind of sum you’re going to be after, then check out the different options available, from grants to loans and crowdfunding.
“Rewards-based crowdfunding refers to the practice of appealing to consumers to pay you upfront so you can develop the products they want to own.
“With so many pitches heading to the main platforms you need something that makes you stand out – look at the pitches that have been successful in the past and try to emulate their approach.”
Refer back to your definition and objective
Now that the new product or service is starting to take on a more solid existence, go back to the notes you made during your initial research.
Check that this is still the product that you identified a need for, that it’s financially viable and fills the market gap you found. It may have changed considerably throughout the development process, so it’s a good idea to just make sure the goalposts haven’t moved too much.
Protect your intellectual property
If you’ve developed something innovative, it may be worth thinking about protecting it as your intellectual property. This means that you can take legal action against anyone attempting to copy it.
You can find out more about this on the government’s website.
Think about product positioning
Positioning is basically a marketing strategy for your new product or service. All the research you’ve done up to this point will be put to good use, 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. That will and really get momentum going for your new offering, rewarding all that hard work you put in.
No matter how much research you do, there’s sadly 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! Give some thought as to the timing of the release to ensure it makes as big of a splash as possible.
Is it worth holding off a few weeks to make sure you have the proper strategy in place? Or perhaps it needs to get out there ASAP while relevant conversations are happening online.
Before launch, it’s important to make sure that staff are trained up in the new service or have had time to familiarise themselves with the product, so they can advise customers properly.