Innovate or Die
The Right Product At The Right Time
by Michael L. Sheffield
CEO The Sheffield Group
More and more direct sales and network marketing companies are recognizing the importance of the old adage, "Innovate or die." For Multi-Level Marketing (MLM) corporate owners working to maintain and protect their most precious commodity, their positive momentum, it is critical to introduce new Network Marketing Products in order to maintain customer and distributor interest and increase sales.
NEW PRODUCT NEWS defines a "new" product as something a company is making or offering for the first time. However, I feel the definition of a new product for a direct selling company goes much further. Any new product should have unique features which are best marketed by word of mouth, and which position the company as "first to market" or as "significantly improved" over existing products.
Your ability to identify new products or product trends can accelerate your potential financial success. The key, however, is in combining a "hot" new product with a dynamic and duplicable marketing concept and a strong distributor support system from the marketing company. While the criteria for determining the strength of your company and its marketing system is not the subject of this article, it is a factor, among others, which you should consider in your evaluation of the potential success of any new product for distribution.
Of course, every company will tout its products as the latest and greatest. But we all know how critical timing can be in terms of achieving your "short cut" to financial independence. Last year's hot item may be this year's "me too" product in the highly competitive world of copy cat marketers. Before jumping into a new product venture with your time and money, you want to make sure that the product is truly unique. Finding out too late that you have numerous competitors can make the difference between a fun filled experience introducing your product to enthusiastic distributors and customers who are eager to buy or finding yourself involved in plain old hard work.
Choosing a successful new product to market requires addressing all the following components:
New product ideas and concepts must be based on an accurate assessment of consumer needs, wants, and expectations. A company generating new product concepts and marketing systems must properly position the product to create enthusiasm within the ranks of the MLM company distributors. Finding exciting new products should be high on the priority of corporate owners if they are to "catch the wave " of a new product trend.
Here are nine key questions you should ask in evaluating each product under consideration before making a time and financial commitment:
- Does the concept, which differentiates this product, fill a need or satisfy a want of the customer?
- Will the customer perceive a legitimate value in his or her purchase?
- Will the customer recognize quality in the same way he or she does with national brand names?
- Does the product offer the customer superior performance compared to similar products already available?
- Does the new product solve a problem for the customer which is unaddressed by similar products?
- Is there a convenience factor that places the new product ahead of all similar products?
- Is the product consumable or does it offer some type of residual income stream?
- Are profit margins sufficient to sustain your efforts?
- Can you develop satisfactory support materials and sales aids to make your job easier?
The product itself: its physical components, ingredients, and characteristics must be appealing to your customers and one in which you can personally believe. Taking the product and packaging from initial concept to prototype reality is the next important step.
Yes, you may want to test market the product before making your decision to jump into a major financial commitment. Evaluating the product with a select group of distributors in order to select a "winner" can save a lot of money and warehousing of unsold inventory. Since your present distributors are both customers as well as independent sales agents, they represent an excellent resource for evaluating the product features and benefits. Don't just make your decision on emotion, make it on logic and good business sense.
Without new product innovations, established marketing companies run the risk of relinquishing their brand leadership to young and aggressive MLM companies who "copy cat" their concepts with less expensive "knockoffs". These emulators use the same marketing strategy as generic brand products in retail stores which thrive when a new brand of product is in its momentum stage. Lounging in your comfort zone is the surest way to lose your market share.
Today, when choosing new products for a successful launch with a Network Marketing company, one needs new initiatives. Why? Because 80% of new products introduced through traditional methods of marketing fail.
Why do so many new products fail? One theory is that some products are too new for the marketplace. Maybe the timing isn't right. Numerous new product concepts that initially failed later became giant successes. Leonardo Da Vinci's airplane was laughed at. It took twelve years for Kellogg to convince consumers that its cold cereal breakfast was the perfect way to start the day. The benefit of increased fiber in the diet and consumption of fiber supplements was for years considered just another fantasy pushed by the health food nuts. Now, the medical profession has discovered and embraced the proven benefits of dietary fiber for preventative health care.
There are those visionary inventors and entrepreneurial marketers that have envisioned product concepts that are years ahead of the competition. These discoveries may be by design as in the case of a professional product development. However, in more cases than you would expect, winning new products happen by accident through the creative efforts of entrepreneurs with an open mind for opportunity that happen to be in the right place at the right time. There is an old saying that "even a blind hog finds an acorn sometimes." However, as a result of my years in sales, marketing, and product R & D, I am convinced that you can't leave new product sourcing to chance. We hope to have lady luck on our side, but why not stack the cards in our favor?
While consumers typically resist change in their buying habits and are often not ready for new innovative products, innovative products are ideally suited to (MLM) Multi-Level Marketing and/or direct sales because these products can be promoted by word-of-mouth and personal testimonials. While I know of no academic studies regarding the success or failure of products introduced to the marketplace through MLM, my personal observation is that the acceptance of innovative products is much higher through Multi-Level Marketing than through traditional methods. Why? Because "word of mouth" marketing methods are used through a network of independent distributors. MLM companies can pioneer exciting, innovative products in a cost effective and expeditious manner; whereas, traditional marketing companies may not be prepared to take the entrepreneurial risk necessary to launch a totally new and unproven product concept.
Certain criteria should be followed to evaluate any new product that you as a corporate owner may be considering taking to the marketplace. First and foremost, what benefits does the product offer the consumer?
- Is the concept, which makes the product different something the consumer needs or wants?
- Will the customer perceive a legitimate VALUE in their purchase?
- Will the customer recognize QUALITY in the same way they do with national brand names?
- Does the product offer the customer SUPERIOR PERFORMANCE compared to similar products already available?
- Does the new product solve a problem for the customer not addressed by similar products?
- Is there a CONVENIENCE factor that places the new product ahead of ALL similar products?
- Is the product consumable or does it offer some type of residual income stream.
- Are profit margins sufficient to sustain your efforts?
- Does the product have satisfactory support materials and sales aids?
Step 1. Product Concept Evaluation
New product ideas and concepts must be based on an accurate assessment of consumer needs, wants, and expectations. A company generating new product concepts and accompanying marketing techniques must position the product to create enthusiasm within the ranks of the MLM Company distributor base. Finding exciting new products should be the corporate owner's primary focus if they are to "catch the wave " of a new product trend.
Step 2. Prototype Formula Development
The product itself: its physical components, ingredients, and characteristics must be appealing to your customers and one in which you can personally believe in.
Step 3. Test Marketing
Yes, you may want to test market the product just like the big companies do before you make your decision to jump into your marketing commitment. Testing and evaluating product yourself and with a select group of distributors in order to select a "winning" product formula can save you a lot of money and warehousing of unsold inventory. Don't just make your decision on emotion, make it on logic and good business sense. This can be accomplished through assembling your own little focus group of friends or present distributors. Since your present distributors are both customers as well as independent sales agents, they represent an excellent resource for evaluating the product features and benefits since they personally consume as well as market the end product.
Michael L. Sheffield is the CEO of The Sheffield Group, a full-service direct sales and multi level marketing (MLM) consulting firm. He is a Co-Founder and Chairman Emeritus of the Multi Level Marketing International Association and in 2001 he was inducted into the MLMIA Hall of Fame. He and the Sheffield team have assisted in hundreds of national and international MLM corporate start-ups as well as offered a full line of services for established direct sales companies including consultation on MLM Website development. As the most noted expert on compensation plans, he has been a guest lecturer on the subject for the DSA, University of Illinois, University of Texas, Berkeley and Harvard Alumni Association. He has helped launch over 200 new products marketed by direct selling companies around the globe. He can be contacted at 480-968-6199, The Sheffield Group, 2239 N. Hayden Road, Suite 103, Scottsdale, AZ. 85257, website address: www.sheffieldnet.com.
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