Why Your Business Should Consider Launching New Products

Get ready for a cliché: Sales are the most important aspect of any business!

Now that it’s been said, we can focus on the more important item which is how to generate sales. There are thousands of books covering the various ways to generate business — referrals, up-selling, cross-selling, cold calling, direct mail, SEO, content marketing, social media marketing, etc., etc.

There aren’t many books on a concept that seems woefully underrated — new product development. Every business should be thinking about this on a regular basis and very few actually do it.

The Supremacy of Selling

Enter Ready, Fire, Aim by Michael Masterson. He argues that every business consists of just five functions:

• Coming up with new and useful product ideas.
• Selling those products profitably.
• Managing processes and procedures efficiently.
• Finding great employees to do the work.
• Getting people, procedures, products, and promotions going.

Masterson dubs the core of this process the “supremacy of selling” — your top priority as a business owner or leader should be selling and marketing above all else. Without sales, he argues, it is very hard to sustain an ongoing business.

This is where product development comes into the picture. Product development is one small subset of the sales & marketing function. Coming up with new ideas to convert into sellable products and services is a key role for the person at the top of the organization.

The key is not to sit back and say: “my products and services are selling just fine as it is.” Maybe you run a residential lawn mowing business and think you mow lawns and that’s that. How about offering a fall clean-up? Or fertilization? Or gutter cleaning? Maximize the time you are already spending working with your current customer base and find new ways to attract new customers.

The Importance of Innovation

In Clayton Christensen’s book The Innovators Solution, he dives into what is described as sustaining innovation and disruptive innovation. In the former, incumbent businesses are doing what they’ve always done with slight/incremental improvements in the core product. In the latter, new and emerging businesses are disrupting and destroying entrenched players with new products and services, offering something radically different.

Christensen talks at length about building “new-growth businesses”. I interpret this not as building an entirely new business, but continually looking at new businesses within your business. Again, the concept of expanding to offer a fall clean-up service or a subscription newsletter service or a monthly retainer package, etc.

The idea that sustaining innovation favors the mature business while disruptive innovation favors the new entrant is a sign that we need to be constantly vigilant when it comes to our business.

This means that slight improvements in your product will only keep new competitors at bay for so long — someone is out there working on how to deliver the same product or service faster, cheaper, and better than you!

It’s not enough to sit back and rely on what has been working lately.

Why Does This Matter?

You might be thinking new products or continued product development aren’t important, especially to your business which is consistent each year. I challenge you to think out 5–10 years and what your business might look like. If you’re mowing lawns or operate a restaurant or any service/product-based business, how many new entrants will be there to compete with you? Hint: probably a lot!

If you offer the same service (singular) forever, then you’ll forever be competing on price against new competitors. This isn’t a great formula for success.

Here are a few reasons to keep the new product engine humming:

• Markets change, new entrants are constantly looking for a foothold or ways to take business from you by doing things cheaper or better.
• You probably can’t deliver your product or service at the lowest possible price in your market. Don’t compete on price alone unless you can.
• Growth is good — New products and services lead to additional revenue and profits. This creates a world that’s better for business owners and employees alike. Wages increase and busines value improves.
• Lower your risk — When your doctor tells you to take the cholesterol medicine you listen. Concentration in a single product or service or customer is the business equivalent of high blood pressure. New customers and products are the equivalent to taking your blood pressure meds.

We love to help small and medium businesses tackle improvements in growth and operations. Call or email if you’d like to discuss getting help with product development at (888) 402–2203 or info@AlphaAcct.com.