Why Most Products Fail
What's in it for you?
Consider this case using VOC to hit the bullseye:
The request: Better temperature measurement for an industrial machine.
The need: We determine the real need is to eliminate costly unplanned shutdowns of manufacturing lines -- costs as high as $1000/hour plus emergency maintenance.
The benefit to meet this need: Early warning of machine failure so problems could be addressed during regular maintenance.
The product that delivered this benefit: Intelligent condition monitoring instrumentation embedded in an industrial machine.
Cost to build: ~$1000
Target price: $2000
One of the first two plants to test it offered $20,000 for us to leave the prototype in the plant.
Our result: profit margin 19 times higher than expected was attainable.
Customer result: ROI in 6-12 months due to avoided plant shutdowns and significant savings after that.
Win-Win results are typical when you really understand your customer's needs. The requirements that guided the design of this product met the most important customer needs well because they were based on a significant "voice of the customer" effort.
End results:
Higher margins
Lower risk
Competitive advantage
That's what's in it for you.
Why most product development investments have negative ROI
The Problem
New Product Development has become the most important engine for revenue growth.
Yet ... 75-80 % of all new product development projects fail! Why?
"We've all heard the saying "measure twice, cut once." If you've ever done a home improvement project you also know that it didn't take more than one or two big mistakes for this to become standard operating procedure.
So why is it that companies don't often apply this to their product development projects? Those are significant investments of the company's resources. Consider the even larger opportunity costs and you see that those projects are significant investments of the company's future.
Yet only 20% of all new product development projects succeed.
Only 20% of startup companies survive, only 10% thrive.
Why failure?
#1 reason: not understanding the customers' true needs.
When the failure is technical, it's most often in the integration.
New Product Development does not have to be high risk.
The Solution
At BREAKTHROUGH NPD we support most product development activities from primary market research, through technical development and test, market testing to launch. BUT most importantly we are specialists in uncovering customer needs as well as technical integration. We address these primary causes of failure to stack the development odds in your favor. That's competitive advantage and long-term value for you.
Is there anything here for you?
Copyright © 2006 Breakthrough NPD.
All rights reserved.
Privacy | Sitemap
Webmaster
