Why Bad Things Happen to Good Products

Did you know that most new hi-tech gadgets never get to become consumer favorites? It might also surprise you to know that it’s not a lack of sales efforts that derail these new product launches — but too much emphasis on selling.

Sometimes the Devil Isn’t in the Details

One might expect that the more strongly a salesperson believes in his or her product, the more effort they will put into selling the product. Yet, the reverse is often true.

It turns out that when pitching new products, salespeople tend to focus too much of the conversation on product features while asking the potential customers too few questions about their needs.

As a result, the potential customer fails to see the real value that the new product will create for them or for their firm.

Salespeople tend to believe that a new hi-tech product will virtually sell itself, and they allocate less effort into counseling potential customers. Instead, they tend to allocate more effort for products they doubt, believing the weaker products will require more finessing in order to get them “flying off the shelves.”

Actions for Firms

Managing Effective Communication

Firms can change the mindsets within their sales teams by helping their employees communicate differently about products. With less pitching and more consulting, salespeople can inspire the confidence that clients need to make the purchase.

When communicating with potential clients, salespeople should release certain types of information in stages.

Correcting Effort Allocation

Firms also need to inspire salespeople to place more effort behind the products they believe in the most and target the right customers first.

Companies can follow up on these steps by identifying best practices of the launch process, understand how their salespeople interface with customers and develop benchmarks.

Why This Examination?

New product development — not mergers and acquisitions — is the most sought after source of growth for today’s businesses. But to the dismay of many, 65 percent of new products launched by established companies failed in 2010, which cost the companies $260 billion.

The goal of this examination is to strengthen the performance of sales employees, and help firms better evaluate and measure their efforts.

Darden Professor Thomas Steenburgh and his colleague and co-investigator Michael Ahearne, of the University of Houston, C.T. Bauer College of Business, conduct research on sales and marketing. Specifically, they uncover the best ways for firms to motivate their sales teams. This examination is part of a series of investigations involving sales people, senior executives in hi-tech corporations and technology entrepreneurs. Information was also presented from the published paper “Managing Sales Force Product Perceptions and Control Systems in the Success of New Product Introductions,” by Ahearne et. al. 2010 in JMR; “When Choice is Demotivating: Can One Desire Too Much of  a Good Thing?” by Ivenegar & Lepper 2000 in JPSP;  “Why Bad Things Happen to Good New Products,” by Neil Rackham 1998 in JPIM.