Monday, December 20, 2010

What to Consider in New Product Development

I was fortunate over the weekend to run a brain storming session on new product development for a client, a well respected association whose members work with post secondary students. As part of this session, I presented several considerations for an association/company when developing a new product. Given the reception of these considerations by the client and his board, I thought I'd share them with you today.

Do your customers/members want it?  I realize this sounds a bit silly, but in truth it should be your first consideration. This product should also support the association's Mission as it will not only serve as a revenue source but also support the association's member value proposition and potentially impact your relationship with the member.

Can the product be profitable? I realize this may be a bit obvious, but there are products developed that are considered 'loss leaders' where an association/company will produce a product and sell it at a loss to support a larger initiative, say the association's Mission or driving sales of more profitable products.

Here you have serveral considerations: the goal of the product, the size of the market, costs associated with production and pricing.

First, in many cases you would be well served to make your product a 'continuity product,' like a subscription, insurance or membership. Here you can amortize the acquisition cost over the long term receipt of revenue (Lifetime Value). This also gives you a base market from which you extend the product line to new products and further driving revenue (how many NCIS' are there now, 3?).

Second, make sure you consider your staff's time in developing and maintaining the product. Needless to say, if your staff's time is taken up servicing a $19.95 product sale and they can't service the $250 product sale, you're loosing money.

Finally, can you identify your market? Not just outline who you think they, but actually get lists of them or clearly identify where they congregate (conference, webinare, seminar, list serve, websites, etc.). This will impact the cost of your product and, of course, your sale-price.

I would like to thank my dear friend and mentor, Tony Rossell, who provided me much of the material presented here.

Tuesday, December 14, 2010

Are you asking the right questions to develop your Winning Formula?

I just read the first draft of a booklet being written by my good friend Viney Kumar. Many of you know him and if you don't I recommend that you at least google him and take a look at some of his writtings. A very smart and very genuine guy.

In this booklet, Vinay talks about a "Winning Formula" which is made up of the answers to three simple questions:
  1. What are we selling?
  2. Who are we selling to?
  3. Where and how will we beat the competition?

I want to briefly focus on the first two questions simply because one, this is a blog and an "indepth focus" could write a book; and, two, trying to include the third question brings us to a second volumn.

We often think that the answer to these two questions is very easy and often may even get a bit confused - almost what came first, the chicken or the egg?

But I think this is where most associations and businesses get lost. They may loose track of who their members are or what they need.

The best example of this occured during the recession. Those associations that realized that their members were loosing jobs and, that what they were buying changed from conferences and education to looking for and finding a job, came out ahead. 

Those associations that realized that the market was in greater need of the career services they can provide focused (after all, "association membership is the greatest career insurance that someone can purchase")on acquisition and many managed to stay even or grew. Many of those associations that financial retrenched and focused on saving money, simply lost a great opportunity.

While we seem to be in a 'recovery,' I want to simply point out that the reason the recession was so bad for many was that they simply did not continually ask themselves the first two questions:
  1. What are we selling?
  2. Who are we selling to?

So ask these questions every time you develop and implement a strategy. Use them as a strategic compass to help you find your way to success. 

Friday, December 10, 2010

CalSAE - Winter Spectacular was...Spectacular!

This is just a quick shout-out to my new friends at CalSAE where I spoke on the 2010 MGI Benchmarking Study and provided real life tactics and results to that incorporate the study findings.
I want to thank everyone who attended for attending and hope that you were able to take away a few ideas that will help you achieve your goals.
Gina and the crew at CalSAE did a fantastic job. I especially want to thank Jim Anderson, President and CEO of CalSAE, for coming by and saying "hello" and tell you that you have a great team and run a great show.
As a point of interest, I will be speaking at Elevate 2011 - The CalSAE Annual Show from March 28 - 30. That will be a great session and I hope you'll come by for it.
Hope to speak with you all sometime soon.