Launching a new product can be a significant investment for any company; careful evaluation is crucial to ensure its success. This article will explore critical factors in determining product viability and provide you with actionable steps to assess it.
Assessing Product Viability
As a part of your company’s overall Go-to-Market strategy, you must assess the viability of your product offerings. Here are some key questions to ask when evaluating a product:
- What is your addressable and serviceable market?
- What is your channel and incentive strategy?
- What are your product investment assumptions?
- How do you differentiate the product?
- What is your product penetration strategy?
To fully understand your product’s viability, inspecting the expected performance of your new and existing products using a 360-degree view is essential.
How to Evaluate New Products
Fail fast, get to the “no” and move on—in product development, quickly identifying non-viable ideas is crucial to avoid wasting resources. In addition, product development and viability require a willingness to walk away when things aren’t working.
Select the Right Product
Choosing the right product is critical for success. Consider these three things when selecting new products and predicting their viability:
- Adding related goods or services to a territory already in service
- Moving into a related market
- Expanding either upstream or downstream from your existing portfolio
Guiding Principles for Product Evaluation
To ensure product viability, keep these guiding principles in mind:
- Evaluate competitor offerings to estimate opportunities and understand market expectations
- Understand where a new product fits into the overall portfolio
- Make build versus buy decisions within your supply chain
- Determine sales channel requirements and capabilities
- Evaluate time and financial investment requirements to penetrate a market
- Confirm opportunity costs for investing in one product versus another
- Ignore sunk costs
Product Lifecycle Evaluation
When optimizing your product portfolio, it’s essential to understand which products are performing well and which ones are not. Within a product’s lifecycle, you must continue to evaluate the product, the market, and consumers. Evaluation might include taking existing products to a new geographic market, defining the next model or version of a particular product or service, or even ceasing the production and sale of a product or service.
Guiding Principles for Product Lifecycle Evaluation
To evaluate a product’s viability throughout its lifecycle, keep these guiding principles in mind:
- Leverage existing sales and revenue analytics knowledge to inform the price, volume, and mix assumptions.
- Use the voice of the customer discipline to understand desired features.
- Compare demographic and other segmentation criteria.
- Segment your analysis based on the product’s lifecycle stage—early, mid, or late.
- Plan end-of-life for products being decommissioned, including inventory runout.
Clear iQ’s Product Viability Approach
Clear iQ helps organizations evaluate product viability to ensure success. To do this, we:
- Clarify who performs the product evaluation to eliminate internal bias
- Understand your buyer and their motivations
- Use a formalized voice of the customer (VOC) perspective
- Review competitor landscapes, including their position and capabilities
- Validate business case assumptions before showing the financial result
- Assess your product investment roadmap against the voice of the customer’s needs
- Build a roadmap to guide implementation efforts