Diversifying revenue. Product launches. Shiny new toys

One of the interesting changes to come out of COVID, is that consultants and investors have been encouraging businesses to better risk assess the diversification of their product portfolios. For the event industry, lockdown and travel restrictions caused paralysis and exposed the lack of a ‘Plan B’. Most tried to implement one. Some were more successful than others. Some begrudgingly tried to embrace an omni-channel approach, realised they didn't like it, and then ran straight back to events as soon as they could.

Seismic shifts didn’t begin and end with COVID though. One that affected me in 2011 was the UK government announcing its intention to close the Central Office for Information (COI), in effect halting a huge proportion of the government’s funding for advertising, and content marketing solutions. The marketing requirement was still there, but their ability to fund it was gone … pretty much overnight.? It crippled many mainstream media brands that had got overly reliant on government marketing spend. Thankfully the organisation I worked for was able to respond and adapt our business model very quickly, and the potential damage was short-lived. And we grew faster on the other side as a result.

Launching new products was part of the answer for us. It created a wave of excitement within the team, and a re-vitalised sense of purpose, but new launches are sometimes prone to some unintended consequences.

Here’s just a few to think about:

1. Customer relationships: Any change to your product offering provides both opportunities and risks to the status quo with your existing customers. New products may overshadow existing ones, causing customers to re-evaluate their relationship with you. This may be an opportunity for them to support your new product and do more with you, but it could also be the catalyst to trying something different, potentially with a new provider.
2. Chasing the ball: Launching a new product with an existing team could be a fatal move. You might find that your team wins big on the new launch, and then discover (often too late) that your core product’s revenues dipped at the same time. Have you just shifted your customer’s spend from one product to another? Have you over-incentivised your sales team on the new product, so they chase the ‘new’ at the expense of ‘business as usual’? I encountered one business that hadn’t spotted this, and it took 9 months to claw back their position. ?Allocating resources wisely will ensure both new and existing products receive their due attention.
3. Clear Customer Communication: Your new product launch may be complementary, but it may also open up new markets. Amplified marketing messages around new product launches can unintentionally give the illusion that your business is changing direction. To avoid confusion it’s important to ensure that you continue to communicate with existing customers and reinforce the strengths of the entire product portfolio to the market during a new launch.
4. How will your competitors respond? Your competitors will be eager to exploit any cracks in your communication. Here are a few things their sales teams could be saying to sow the seed of doubt about you.“Looks like they’re pulling away from the core product offering you use”.“They’re no longer focussed on your market, and aligning themselves to different sectors"."We’re hearing that all their product innovation resource is being diverted away from the products you use into these new focus areas”.“Some of their customers are joining us, because they’ve noticed a decline in their customer service and response times since they’ve shifted focus to their new offering”.
5. What do your clients really think? Now is the time to ramp up your client engagement. Gain customer feedback, and share this within your organisation to enhance both existing and new offerings, and support your marketing messages.
6. Employee Morale: If you have a separate team working on the launch, it’s important to recognise and celebrate the achievements of teams working on both new and existing products. It can be disheartening to see colleagues on a new product launch getting all the attention, or earning handsome commission payouts, all whilst fist-pumping, chest-bumping, and (in one case I remember) doing celebratory press-ups. Your core team will still be delivering successes on established products where the low-hanging fruit has long been exhausted.
7. Keep a close eye on your brand: Protection of your brand identity and values are way more important that the short-term revenue gains. Your sales and marketing teams should be gamifying their messaging to ensure any new product can demonstrate how it aligns with your overall brand identity, and complements existing offerings for your customers.

In summary, new product launches may be an essential part of your growth story for the year ahead, but their success can be enhanced by how you align them with the whole business, and take your internal and external stakeholders on the journey with you.

As always, keen to hear your views, and any other tips for us to learn from.