Thinking about launching a new product as part of your annual strategic plan? Well, you’re not alone. In fact, more than 3,000 new CPG products are launched each year.
Steve Jobs claimed that “Innovation is the only way to win.”
While innovation can be a key factor for brand growth, merely innovating doesn’t guarantee a win. In fact, of those 3,000 new CPG products that will launch next year (perhaps yours will be one of them), nearly 85% of them will fail (according to Nielsen). Now, I’m not throwing this number out there to be depressing—and we could debate whether or not Nielsen’s definition of success—generating a minimum of $50 million in US sales in year one—is relevant outside of behemoth, established CPG brands. But launching a new packaged goods product is tough—no matter the size of the brand behind the launch.
Much of the new product work is done behind the scenes—from research and development of a truly consumer-relevant, competitively positioned product to the fight for distribution and shelf space. While this foundational, behind-the-scenes work is crucial, what happens after a new product hits the shelf is equally as fundamental to the success—or failure—of a product launch. So many brands today focus their energy on getting the product to the shelf and lose sight of encouraging consumers to reach for it once it’s there.
So how do you get consumers to try—and buy—a new packaged goods product? While there is no secret marketing recipe, there are some tactics that have proven impactful in the quest for consumer adoption of a new product.
Here are 3 tips for making the most of your new product marketing budget:
- Reach the Right Consumer: Sure, this is the age-old advertising truth—reach the right consumer at the right time. But in today’s data-driven world, we have the ability to do just that. High-volume category and brand buyers are more likely to try a new product than the average shopper. And one Catalina study showed that less than 1.5% of consumers account for 80% of volume and thus are responsible for the success of a new product. The answer? Supplement traditional mass reach/awareness with laser-focused digital tactics that leverage purchase data to target these shoppers.
- Fuel Trial: The mere presence of a new product on the shelf will spark some curiosity with consumers, but it’s not enough. American shoppers can be, well, boring. We buy the same 150 items during our shopping trips. So as a new product, not to mention brand, the first two years after launch are the critical time frame to fuel trial. Coupons, sampling programs, rebates, and cross-promotions are all great ways to encourage consumers to make that first purchase and, hopefully, for you to break into their regular purchase habits. But it’s not enough to encourage trial. CMS Wire reports that just over 10% of new product consumers remain engaged after 52 weeks. It’s imperative to follow up that first purchase with a specific strategy to turn those triers into loyal, repeat buyers.
- Get People Talking: People trust people. In fact, 56% of consumers cite friends/family as their top source for new product information, according to ShopKick. One way to encourage trial of a new product is to get people talking about it. Incent ratings and reviews. Encourage social sharing. Tap into influencers to extend reach and pay to distribute these “referrals.”
We’d love to hear more about your innovation plans—and brainstorm ways to launch those products. Let’s talk.