The Top Ten Reasons Why New Green Products Fail

Karenjanowski100x_0 Statistics on the exact percentage that fail may be a matter of some debate. Still, most product innovators and academics would agree that more than half of new products fail to meet their financial goals in the marketplace.

Why? EcoStrategy Group has compiled a list of the top ten reasons, based on my personal observation and opinion gleaned from over 25 years experience bringing new technology products to market.

1. Target market is not defined correctly.

A clear definition of the target market is fundamental to creating and launching a product that will be successful in the marketplace. It drives the focus of product development, marketing and sales efforts. Without a clear definition that is commonly understood by all functions, the company can flounder in making critical go-to-market decisions about everything from product features to ad campaigns.

2. Product is mis-positioned.

Positioning a product requires answering the question: "What makes this product (or service) more, better, or different than competing solutions in the mind of the customer?" It seems pretty straightforward but it requires that the marketer understand the value proposition of the product, the competing solutions, and the customer’s perspective.

3. Product’s benefits are not understood by the target customer.

The marketer may not truly understand the needs and values of the target customer or the relative importance of the product benefits. This is a particular pitfall in the clean tech business, where companies may incorrectly assume that “green” benefits are the most important to the buyer when, in fact, they are farther down the list.

4. Product doesn’t address important customer needs.

Products can also miss the mark by neglecting to address a key need. For example, an application software company I worked with offered a product that provided significant benefits to the end users. However, the product was not available to run on certain platforms that had been selected as standards within many IT environments. Until this important customer need could be addressed, the market for the product was limited. Revenue goals were missed.

Product is seen as incomplete, or it requires too many ancillary services or other pre-requisites.

Some technology products require certain existing infrastructures or special expertise in installation and configuration. Or they may require training in order for customer to get the full value of the product. Without these surrounding services, the product offering is not a complete solution from the customer’s point of view. In order for sales to occur, these services must be made available either directly by the vendor or by qualified affiliates.

5. Product costs too much or the total cost of ownership is out of line with perceived benefits.

If the target market believes the total cost of the product is out of line with the benefits it offers, you may be able to reduce the total cost of ownership through price reductions (at a still profitable price) or design changes. Or you may be able to uncover additional benefits and convince the market that they are significant. In many cases, however, this mismatch between cost and benefits is the death knell for the product. It can signify a fundamental failure to offer a solid value proposition.

7. The company is sending mixed messages to the target market.

The mixed messages problem most often occurs when disparate functional groups within a company are responsible for communicating with the market but do not coordinate their efforts. This reduces the overall return on your sales and marketing investments and hinders your ability to maximize revenue.

8. Sales and marketing efforts are not focused and aligned.

With constrained marketing budgets, most technology marketers cannot afford to undertake numerous marketing programs against multiple market segments and still hope to have a significant impact. It's often a wiser course of action to do fewer things but do them better. Save some programs for later. Target specific markets for initial emphasis and then roll out to others.

9. The company is under-investing in marketing and sales efforts.

While spending money in marketing and sales is no guarantee that a new product will be successful (witness the excesses of the days), underinvesting in marketing and sales can result in significant revenue shortfalls.

10. Market is smaller than originally projected or product is too far ahead of the market.

Estimating market size for a new product is hard. It involves numerous assumptions and a large dose of forecast risk. And, while it is possible to make reasonable estimates, it is the nature of entrepreneurs and innovators to be optimistic. After all, a positive outlook is essential to overcoming the obstacles inherent in creating and launching a new product.

Improving the Chances for Success

The single best way to improve the chances of having successful results instead of a list of reasons is to get a solid understanding of the market and customer needs. The first five reasons in this list are the result of failures to truly and deeply understand the market, the competition, or the needs of the customer.

Excellent execution – particularly in marketing and sales efforts related to the product launch – is also critical. Make the most effective use of expenditures by sending clear, consistent, relevant messages to the market and by making sure marketing and sales efforts are aligned and focused on specific goals.


Karen Janowski is partner and co-founder of EcoStrategy Group, a consultancy focused on cleantech go-to-market strategy and corporate sustainability.

This column has been excerpted from the whitepaper "Why New Clean Tech Products Fail." Download it here (PDF).

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