Recently we did a project for a manufacturer to help them prepare for a sales meeting. They wanted to understand what their staff was thinking but they wanted a 3rd party to gather the insights to ensure their team that there would be anonymity. They questions related to how the “go to market team” (Sales, Marketing, Product Development / Engineering, Customer Service) perceived the company’s products and ability to deliver for customers and their perception of what customers thought about the company.
Later on, customers were to be surveyed to then gaps would be identified between internal perceptions and external beliefs.
One of the questions related to new product introductions, and its corollary, new product development.
The company has a goal of x% of revenues should be derived from new products developed / introduced over the past 3 years. They track this on a rolling basis.
When we submitted the findings, the president said “One thing that jumped at me is the NPI (new product introductions). I always hear internally about the importance. I’m not surprised that the voice of the customer, based upon what our salespeople say, is otherwise.
He asked us “why?”
Now, do you remember the phrase that relates to speaking truth to power? When president’s ask a question, do they want the truth, or do they want the answer that they want … and in this case that answer could point the “blame” on the customer for not seeing the value?
As a consultant, at Channel Marketing Group we believe in sharing our expertise, experience, and research-based opinions.
I responded:
Frequently manufacturers do a poor job of marketing their new products. While they focus on the features and, hopefully, the benefits, they infrequently get to
- Why they developed the new product
- What “problem” it solved
- Who is the ideal customer / end-user market
- How it compares / competes vs the competition
- How to market / display / sell the product
And then, few provide the applicable marketing resources to help their distributors sell the product (inclusive of repetitive training … one-and-done rarely works as cannot get everyone to attend at the same time.) This also extends to a challenge in training their sales team (whether direct or manufacturer reps.)
Additionally, most manufacturers are not marketing the new product themselves to the end-user market (brand and product advertising, direct and email mail (sometimes they rent lists), social advertising, etc) to generate awareness or demand, nor do they hold their own sales team accountable to promote and hence generate demand.
For many manufacturers, the perception is “the work is done when the product is produced.”
I hope this gives more of a perspective from the distributor viewpoint. Manufacturer marketing personnel should recognize that their distributors, and sometimes contractors depending upon the product, are their salespeople, as they recommend product usage (and sometimes they are the buyer, which is different messaging.
He was appreciated of the response as he sensed that his company was starting to drink its own KoolAid. He commented that a takeaway is that “marketing needed to get more engaged with customers versus being a marketing communications group and developing collateral that supports product engineering / product management.”
I’ve noticed two issues:
- Manufacturers release press releases that say “XYZ manufacturer is introducing ABC product, and it can do X.” It’s all wonderful. It is mostly fact-based.
The challenge is it does not say anything about the application, the target customer, the target market, what “void” in the market (or their product line) it fills. You know, the information that “sales” needs to develop strategies, sell the product and to answer questions!
Now, further, when I have spoken with manufacturer reps, they have shared that they receive the same information. They also do not receive any competitive positioning of the product … who does it compete against, why is this product “better,” “where / how” to sell it, what is the application, etc. And don’t ask reps if they get samples or demo kits (some have to pay for them!) or literature (they are told to print the information at their own expense, but to conform to corporate brand strategies!)
Which begs the question, how are salespeople trained, and guided, to generate sales?
- The second issue is the lack of product development knowledge by marketing and PR personnel. When we receive manufacturer press releases for HVACRTrends, I frequently push back and offer to publish an article if they can answer “why the product was developed,” “what research was done / customer input received,” “what differentiates the product,” “what are the targeted applications,” etc. After all, I figure if we’re promoting the product to distributors, who are fractional salespeople for a manufacturer, maybe distributors should have more information to help them write an order (sell the product.) The end result, few manufacturers respond with an article. It is work for them. They don’t know the information and don’t want to ask and/or admit they do not have the information.
So, what does it all mean?
- As manufacturers seek to increase sales, are they investing in voice of customer and a true product development process with a goal of differentiating their products and adding value or are they seeking line extension with undifferentiated products in the hopes of winning some share?
- If marketing doesn’t understand the “why,” can they develop proper material to communicate and train sales? Distributors? Capture customer interest?
- Does marketing want to do the work to understand the “why” or would it prefer to design collateral that only communicates features and the assumed benefits?
- How successful can NPI’s be if most, if not all, competitors in a space have the same thing? I understand needing a competitive offering but that is getting to “equal,” not to winning.
- And if you can’t market what you have manufactured, how will you generate long-term sales … why does “the customer” need your product vs what they currently use and/or your competitor.
If senior management is committed to NPI it needs to fund the entire process, not just the design and manufacturing / sourcing phase.
What do you see regarding the introduction of new products? Who does it well? What should be some of the “basic” issues addressed in an NPI strategy?
