How to meet sales and profit targets with a new product? How to increase return on R&D investments? How to prevent market cannibalization and speed up customer adoption? Indeed, expanding a product portfolio can become a millstone around managers’ necks. To help on the innovation way, this article brings to the table the tips born through years of CRM consulting experience.
The Stage-Gate International study of common idea-to-launch practices revealed that 90% of best performers in new product development (NPD) had a clear NPD process with defined activities at each stage and a precise decision-making framework. A detailed list of success factors also includes:
• Product differentiation with a good value proposition
• Incorporation of a voice-of-the-customer program
• Early cutting of losses (weak product ideas/concepts)
All the three factors are linked to how customer-driven the process is. According to innovation consultants, customer orientation doubles the market success rate and increases innovation productivity by 4.5 times.
Summing it up, to successfully roll out a new product, a company should include customer sentiment in the innovation process. In this regard, some enterprises may go as far as Lego did with Lego Ideas – a customer portal for idea crowdsourcing and validation. Good news for those who is reluctant to go this extra mile, there’s no need to look for extra tools to arm the R&D department if they know how to use CRM beyond sales management. Read on to find out how CRM software can assist throughout the NPD process.
The right start is to source ideas of new products or features externally. CRM software allows to do it either directly via customer surveys or more softly (recommended) via prudent logging of customer sentiment. For this, sales managers should use activities records in CRM (or even an NPD field customized by CRM consultants) to jot down customer ideas after calls, meetings, or emails. Those can include appealing characteristics of competing products, possible complementary services and goods, modifications of features and physical attributes. Most suggestions will be unrealizable; yet, isn’t that a good start for a brainstorm? By the way, don’t rush to bury all the rejected ideas – instead, list them in case some of them turn more realistic in the future.
Also, as sales agents’ notes are recorded in the CRM system, R&D assistants will search the logged data without disturbing sales managers personally. And if it’s needed to clarify idea details, profiles will help to contact customers most conveniently (like, in their time zone’s business hours).
After idea screening and concept development, R&D managers can test the viability of the product concept and take go/kill decisions early. The CRM will help to spot key customers (the ones with a long-standing purchase history and a high LTV) and survey them to discover if the new product is what the market needs. An established workflow with reminders, notifications and timelines (similar to lead nurturing), will let R&D and marketing managers carefully approach relevant customers within project deadlines while retaining the customer-oriented image of the company.
Demos and tweaks
Marketing strategy development and business analysis are over; it’s time to develop and test product prototypes or demos so as to ensure the design appeals to the customer and identify some last-minute tweaks required for the product success. At this stage, marketers can also learn whether the product positioning is correct and even test some advertising messages. Again, CRM as a platform for surveys, managing demo workflows, and customer interaction perfectly assists in the task.
Finally, a new product launch is coming. To shorten the time to market, marketers and sales people can identify customer purchase intent early. CRM data analysis will let them recognize possible buyers in the customer database and effective ways to approach them (for example, picking the best performing channels or just the customers’ preferred ones). Key customers can be offered a free trial to trigger the word of mouth and win an extra loyalty point as a side benefit.
Ok, teaser messages are delivered in line with a set workflow, and the market is warmed up for the actual release. Based on the customer data analysis, CRM software can suggest cross-selling opportunities for sales people, visualize selling tips (for example, product advantages that correlate with customers’ needs as identified during the idea generation and concept testing stages) and even lets sales managers detect problems with the new product adoption, if any, and their reasons.
The NPD cycle ends with post-launch analysis. The CRM system tuned by a team experienced in CRM consulting can gather data related to a new product in this product’s profile. For example, using tags and custom metrics, the software can put together all CRM notes regarding a new product’s development and performance. CRM records that can be potentially valuable include:
• Customers that contributed most to the product idea (to maintain customer loyalty)
• Common technical issues identified by the service support team (to improve the product in the future)
• Leaders in new product (cross-)selling on the sales team to assign rewards and gather best practices), etc.
The metrics module can allow analyzing new product performance right from the launch date. By automatically accumulating projected and actual revenue, the software can visualize the needed KPIs for executives (for example, revenue against R&D investments, contribution margin, and sales volumes against the forecast).
On a final note
A new product launch is always kind of a big pain for a company. Including the CRM in the NPD process lets customers contribute to the market innovation in an organized way and consequently helps a company to mitigate the risk of failure. This way, CRM software ceases to be a sales-only tool and allows a company to combine R&D, marketing and sales efforts so as to produce what the market needs and win customers faster.