Articles, Presentations, & Press Releases

The Launch Pad
March 2004

What’s New?

What Does “New” Mean?
When you are preparing to develop or launch a new product, who determines that the product is NEW? It might be the CEO, the technical team, the business development director, or the marketing team who actually gives the product the NEW designation, on the basis of some set of criteria. A product might be new to the company, new to the industry, new to the customer base, or may employ new technologies. The NEW designation might mean something entirely different to employees inside the company than it does to the external market. The new product might require varying degrees of effort to develop and launch, from merely updating a datasheet, to hiring a new sales force in order to enter a new market niche.

A Marketing Ploy or Something Really New
When the product will be new to the external market, then it’s important to find out how the new product compares to the company’s existing products. Perhaps the new product is really just an enhancement to an existing product or offers one or two additional features or better performance characteristics. In that situation, the target customer might perceive the “new” designation as merely a marketing ploy; it’s not really a new product to them. Perception is the key, especially when it comes to customers. However, if the product really is separate and distinct from existing products, then a full-blown marketing campaign is warranted – one that defines and educates the customer about the new product and all its features.

New Product, Existing Customers
Selling a new product to existing customers may be just a matter of creating additional sales collateral for the new product and training the sales force on how to sell it and compare it to existing products. It’s important to point out the benefits of the new product, but also important to tread lightly. Your customers might be very happy with their X2005 Server Accelerator that had a learning curve of 2.6 years and are just not ready to start that process again. Still other customers always want the newest, latest solution available. It’s important to offer choice, but to respect that choice. In order to be effective, sales people must have a firm grasp on exactly what’s new about the new product.

New Product, New Customers
Selling to new customers is always more complex, even if you’re just selling your existing products. But selling new products to a new group of customers is akin to starting a whole new company. Not only do you have to establish a new presence in the market, but you also must implement many marketing programs to develop awareness of the product and convince customers to buy it. This approach may require the involvement of a cross-functional team to develop a plan for entering the market, including business development people, marketing strategists to decide when and where to roll out marketing programs, and sales managers to plan sales staffing and training.

Keeping the Product Family Updated
The technical, marketing and sales organizations need to work together as a team when a new product is announced internally. One of the first steps is to determine how the new product will fit into the current product family or set of product offerings that the company already has in place. Does the new product provide improved performance (faster, more accurate, more reliable)? Does the new product offer better compatibility with other products that are used in its most common applications? Is the new product the beginning of a new line of products that the company will be developing going forward? What will be the price points for the new product? And most importantly, will the new product reduce interest in the company’s existing products or make them obsolete? During these discussions, it is wise to pull out the long-term product roadmap, and map in the new product and its relationship to existing products as well as others planned for the future. All key departments should be involved in this discussion. The technical people will know the technical fit with other products. The marketing people need to know how to promote and differentiate the new product. The sales people will need to know how to sell it. And everyone needs to agree on how everything fits together.

Quick and Quirky Example
You are the marketing director for a medium-sized company that produces anti-spam and firewall software. The CEO has just announced a new partnership with a large ISP who wants to adopt a version of the company’s anti-spam software and resell your company’s software to their customers. This will require that your company’s core product be customized for them, and so a NEW product will be developed, confidentially code-named “Spamageddon”. (The ISP will rename it later so that it will carry their brand name). The customization will take about six months. As part of the agreement with the ISP, your company will be able to create/customize the software for other ISPs after the first ISP’s product has been on the market for six months. So, the CEO of your company has asked you to put together a 2-year strategic plan for entering this new market niche, and to identify any additional staffing that might be required. He also wants you to work with other key departments in the company such as finance, business development, engineering, sales, or customer support.

You first meet with the CEO to gain a better understanding of the partnership with the ISP and the business model. From that meeting, you discover that the ISP will be charging their customers $5.00 more per month for their version of Spamageddon.

You then call a meeting with the rest of the team, with the purpose of identifying the technical specifications of Spamageddon. Two engineers are in attendance and they explain that the new version of the software will allow the user to create categories of spam for filtering and sorting, so that the user can then view them by category before final deletion. The company’s current software filters by using established spam criteria without user-defined categories.

The consensus of the rest of the group is that the product will be so different from the current product that a whole new marketing campaign will be required, especially from the standpoint of user-defined categories for filtering. That would mean a whole different set of messages as well as some new venues for promotional campaigns. Additionally, some comarketing programs may have to be developed for new ISP resellers. At least two more people would be needed to develop and roll out new marketing programs. The business development manager decided that this would also create a new marketing niche and distribution channel, creating the need for a new channel manager to develop more partners. The sales V.P. said that he would likely have to recruit two more people who knew the ISP market in order to develop those accounts. Also, the sales budget would have to be increased for new product training for the existing sales force. The finance manager made note of the new requirements and asked each functional organization to develop a revised two-year forecast, including marketing and sales budget and also the staffing plan.

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The marketer didn’t know what to do
When it came to describing “what’s new”
So he summoned the nerds
Who supplied the right words
And so the bottom line grew.

(note: I’ve never, ever claimed to be a poet.)

Catherine Kitcho
The Launch Doctor