Lessons From the Marketing Wars
By Louis A. “Duke” Fanelli
Over the past decade, new product launch success rates have been abysmal. Product failure rates have ranged between 70 percent and 90 percent. For banks and other financial service companies, this carries an even heavier weight, since confidence in an institution and trust in its products is the cornerstone of the customer relationship. However, with careful planning and a clear understanding of the marketplace and opportunity, success can certainly be achieved. We can learn a number of things from product introductions and re-launches that have gone badly over the past 35 years.
Lesson One: Understand your customers and don’t let research alone dictate business-altering decisions. Schlitz Beer, “The Beer that Made Milwaukee Famous” – for those old enough to remember the tag line – was one of the top selling beers in the early 1970s. The company’s market research indicated that most beer drinkers couldn’t tell one beer from another. Based on this research, the company reportedly adopted a cheaper method of brewing. Schlitz drinkers took issue. By the time the company went back to the old formula, Schlitz had lost significant market share and the company was ultimately sold.
Lesson Two: Test and retest before launching. Persil Power was a laundry detergent catalyst intended to help remove tough stains from clothing. Once it hit the market, consumers complained about corrosive effects that could ruin clothes after a few washings.
Lesson Three: Communicate the product’s positioning, or message, clearly. Happy Family Midge, produced by Mattel, was a doll with a removable “pregnant” belly containing a tiny baby. The doll was part of the company’s Happy Family line of toys that featured older, married dolls. Unfortunately, some people reportedly thought the doll was from the “Barbie” collection and was promoting teen sex, which was not the case. In response, the company added a cardboard cutout of Midge’s husband to the packaging. Unfortunately, the damage had been done and shortly thereafter, Mattel pulled the doll from the shelves.
These are just a few of the challenges consumer goods companies face daily. Financial services companies have even more to deal with when launching a new product.
Challenges to Success
Some of the challenges financial services marketers face are:
• The low cost of entry: There is little or no cost to manufacture, inventory or distribute a financial product;
• Speed to market: The idea is the product; and
• Lack of exclusivity: For financial products the first-mover advantage quickly dissipates.
Financial services are about people’s money and money carries a lot of psychological baggage.People’s attitudes about their finances are highly emotional; money is personal, so relationships often drive an individual’s decision process; consumers have many choices, so how, when and where they transact is up to them; and cost may not always be a differentiating factor in the buying decision. Because of all this extra baggage, financial service marketers have to be more thoughtful during the product development process, and certainly more creative in how to position and market new products.
Three-Step Product launch
A three-step process defines every product launch. You first need to “build a foundation,” then have “ample preparation” and, finally, ensure “organizational alignment around the launch.”
Building the Foundation: Marketers must understand product, pricing and positioning. Internal coordination between marketing and product, compliance, operations, IT and sales must dovetail and coexist with external teams that include advertising agencies, PR firms, designers, printers and others. When working with these partners, it is critically important to share information. Knowledge may be power, but if you are the only one who has it, your product introduction will fail.
Ample Preparation: The preparation stage must start with creation of a plan. The plan should be like a good road map, providing the detail and direction for a successful launch. The plan should include:
• Market research – competitive analysis, target identification, segmentation, etc. – identifying the who, what, when, where and why of the plan;
• Appropriate marketing strategies and tactics – including why and how you will reach your target group;
• An internal communications plan;
• Clearly stated business and marketing goals;
• A plan for tracking and measuring the launch and product success going forward.
Finally, but equally important, the plan must be distributed to the appropriate partners and management for buy-in.
Alignment Around Launch: Both internal and external aspects must be extensively communicated and carefully managed. It is vitally important that proper tracking and feedback mechanisms are in place. The ability to coordinate and track activities will allow the marketing team to make the appropriate adjustments and changes to the marketing mix as needed. Also, measuring marketing return on investment is fundamental.
It’s important that marketing and sales agree on how success will be measured. Finally, report results as often as possible. Results, whether positive or negative, need to be shared and assessed in order to take corrective action or provide additional support.
One frequently overlooked action item for marketers is to “celebrate and share each program’s success.” Communicating and sharing success with internal and external partners boosts morale, improves productivity and creates enthusiasm for the product.
With careful planning, detailed communication and positive reinforcement for the team’s efforts, there is no reason why every product launch can’t be a success.
Duke Fanelli (email@example.com) is president of Integrated Marketing Solutions, a Chatham, N.J. market planning and strategy firm serving the financial services industry. He is also the co-author of “The Financial Services Marketing Handbook.” This article was adapted from Fanelli’s presentation on Marketing 101 at the NJBankers/Bank Marketing Association’s October meeting. For a podcast recording of the complete presentation, visit www.njbankmarketing.com/podcasts