Bringing New Products to Market: Practical Steps for Associations
Many associations are looking for new ways to generate revenue and provide enhanced value to their members and key stakeholders. Generally, there are numerous ideas and concepts floating around but how do you know which ones to advance and how do you bring new products to market? In my previous blog posts, I proposed a conceptual framework and foundational factors to help prepare your association to tackle new business development. Here I explore a few practical steps to ground your efforts and operationalize your program.
First, let’s ground your thinking.
· Stick to your mission. As tempting as it may be, chasing easy dollars that do not meet your mission is simply a distraction.
· Maximize your limited resources. You need to be sure that proposed products fill a unique place in the market, deliver something that is better, or advance innovation.
· Have a plan that outlines how you will develop, launch, and run the new product. What is your exit plan if the product fails? How will you sunset the product when it no longer delivers sufficient value?
Working within these parameters, I outline three broad steps to follow as you contemplate building and launching new business lines and products. Adapted from a variety of models such as Stage-Gate, these three steps provide one approach to business development. Use them as a guide and adapt them to fit your needs. Each association’s culture is unique. You may want to expand in some areas or tighten others.
Step 1: Evaluate the merits of the proposed product.
Before sinking time and resources into a proposed product, evaluate the concept against several core areas. Broadly, does it fill an unmet need that fits within your mission and strategic priorities, and does it provide organizational value?
Literally pull out your mission statement to assess how the potential new product aligns with your mission and consider if your board would agree. The new product does not have to hit the bullseye, but it should be somewhere on the target. If it is a miss, stop right there and table the proposal. While it might be tempting to pursue a new product for the new dollars it can generate, view it instead as something that takes away your attention and critical resources that should be focused on your core work.
Again, a very literal step. Take out your current strategic plan to see which of your strategic priorities the new product supports. Can you make a connection to how the new product fits within the plan and advances the association’s priorities? If it is a complete miss, table it. If it is a great idea but not a current priority, put it in the parking lot for future consideration.
Consider how the proposed product provides value to members, key stakeholders, the industry or profession, or even society. Who would benefit from this product entering the marketplace? Does it enable you to reach new constituents? Try to articulate the value in concrete, measurable terms.
To what extent does the proposed product strengthen the association? Perhaps it enables you to develop additional staff expertise or makes it easier for volunteers to be effective. Maybe it allows the association to enter a new area within the marketplace. Sometimes a new product is an interim step that prepares your association for an entirely new business line.
Does the proposed product fill an unmet need? Determine who else works in the product’s area. Evaluate the quality of the competition's offerings and whether your concept would be better or different. If there are existing providers, can you partner with them to improve the offerings to serve your key constituents better? If you cannot adequately answer these questions, stop and either rethink your concept or table the idea. You do not want to be just another player in an already crowded market.
Here you weigh a product’s upside potential along with the possible risks. Do you need to halt existing work to make room for this new product and does it make sense to do so? Would paying for the new product cut into an individual’s willingness to spend money on dues or existing products? To what extent can the product contribute to overhead or generate profit to support other programs? Is there a potential negative impact on the association or its constituents if you do not launch the new product? Are you willing to launch a new product that forever needs financial support from other programs or membership dues?
Step 2: Flesh out the concept and design the product.
If you decide to greenlight a proposed product out of step 1, begin to flesh out the concept and design it. This step looks at elements such as the design team, ideation, business models, and product life cycle.
The Design Team
Establish a cross-functional product design team to solicit their input from the beginning. Identify a concept champion to lead the team. Depending on the product, you may need input from marketing, IT, accounting, customer relations, meetings, education, and content/program areas. When thinking about resourcing a new product, the question often comes down to build or buy. Determine the in-house resources you have or need to acquire. Alternately, you may decide to contract third parties to fill some of these needs. Include on the design team all internal representatives as well as external partners as needed. Also, include the long-term product manager (who may or may not be the concept champion).
Product ideation draws on the entire product design team. The team lead, who owns the product vision, facilitates a series of strategy sessions to generate fresh ideas, align the project team around common objectives and goals, and assure the entire organization is on board. The team’s role is not just to generate a collection of ideas. It is also responsible for determining business processes and preparing the product for launch.
Business Models and Pricing
Here we look at several elements related to business models and pricing. Will you sell this product, offer it for free as a member benefit, or give it away to everyone? Depending on your answer, you may establish a goal to generate revenue from sales (fee-for-service), sponsorship, a grant, or a revenue share with a partner. Calculate the price and volume the new product needs to break even or generate a profit. Will the market support that price? Is the universe big enough to support that volume? Will you need to offer introductory pricing to create a buzz? How many years will the product need seed money until it becomes self-sustaining? What is the minimum profit margin you require to make the product worth developing?
Product Life Cycle
Typically, a product moves through stages such as introduction, growth, maturity, and decline. Products can move through these stages at various tempos, and some may have a well-defined time length. Look ahead to be sure you are prepared to support the product at each step. Also, document how you plan to measure the product's success throughout the lifecycle. Some metrics will be in place through all stages, and other metrics will come and go. As you move toward the maturity and decline stages, it is especially important to have a clear strategy for sunsetting and possibly archiving the product. For example, how will users be impacted when the product ends, and can they access legacy information?
Step 3: Launch and assess the product.
Assuming you encounter no significant barriers during the product design phase in step 2, you then move to launching the product. The mechanics of a launch can depend on the product itself. The elements listed below can help you to position any launch to be successful.
By now you have the product well-scoped and are ready to bring it to market. Several final elements to have in place include a product brand, marketing and communications plans, and customer service strategy. You may have created some of these in the product design phase. If not, address them here. Include in this final checklist a risk mitigation plan in case the launch takes an unexpected turn.
Determine how you will roll out the product. Will you undertake a full-scale product launch from the beginning, or will you start with a small pilot group to test the product and gradually expand? Either scenario can make sense. A full launch can generate a splash and rapidly create broad awareness. A smaller pilot limits your exposure and allows you to tweak the product before extending it to the full market.
The new product must fit within an existing calendar of association activities or the rhythm of the industry or profession’s annual cycle. For example, launching a new product with your annual meeting may make sense. On the other hand, launching a new product for CPAs during tax season may not make sense. Depending on the timing, you may need to wait several months to launch a new product.
Post Launch Assessment
Once the product has launched, take a moment to celebrate (huzzah!). Then start to assess the product marketing and support operations routinely and adjust as needed. What are additional resources required to maintain or grow the product? Use the metrics you established in the design phase but also be prepared to revise those as well.
Take intentional steps to solidify awareness of the new product throughout the organization. Frequently report the product’s status to all staff and appropriate volunteer leaders. Be a cheerleader for the product to generate organization-wide support and integration.
These proposed product development steps should provide a good starting point for instituting a systemic, mission-driven process. Each time you move through the business development cycle, you will become more comfortable with the steps and establish an agile approach, allowing you to bring products to market faster and with more confidence.