Great Products and Poor Sales can go Hand in Hand
An Article Courtesy of Rush Order, Inc. and the 280 Group, LLC
Most well designed and promoted products fail. Why? Doesn’t this defy the logic in everything we learn as product developers and product managers? Not really...
Leverage the following real life examples and practical advice to increase your chances of producing a successful product launch or repositioning.
As a back end fulfillment, customer service, and returns management solution that has processed millions of orders, Rush Order is a primary data collection point for an enormous variety of product launches. In light of recent successful combined efforts as partners, this article blends Rush Order's experience with the 280 Group's expertise as the premier product marketing and product management consultancy firm in Silicon Valley.
Unfortunately, creating new customers while simultaneously minimizing the drop off rate of current customers is easier to imagine than it is to achieve. For example, depending on particular industry standards and a company's product management methodology, return rates can range from around 3 percent to as high as 50 percent of total merchandise sold. Obviously, a similarly shocking disparity is evident when comparing sales figures amongst various organizations.
Successful product management is the result of much more than developing and marketing a great product. Yes, of course, a truly successful product must reach consumer demand en mass with the winning combination of price, style, and function consumers value. While product managers focus on this winning combination, as they should, delivery of the overarching "customer experience" is often marginalized.
The range of possible scenarios is simply staggering:
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Half of all so-called 'malfunctioning' products returned to stores by consumers are in full working order, but customers can't figure out how to operate the devices. - Reuters
In a recent survey of online merchants, 50.7% of survey respondents indicated that less than 2% of the products they sell online are returned, compared to 29.8% with a return rate of 3-5% and 9.2% with a merchandise return rate between 6-10%. - Internet Retailer
40% of online shoppers reported a lack of satisfaction with the item return process. While 51.1% indicated they had never returned an item purchased online, 16.7% noted they had returned an item once, 15.3% twice, 5.5% three times, 3.5% four times and 7.9% five or more times. - Business Wire
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Regardless of the expert research, high technology, and high style rolled into a product, these three essential practices can spell doom or boom for your product launch.
Customers will encounter hurdles. Anticipate the majority of these hurdles and build solutions before you lose sales.
There are plenty of circumstances that seem to arise for nearly every company launching a product. Running a beta test internally or with a predetermined set of potential early adopters can help you sort out which circumstances are going to present the biggest headaches. Develop your products and setup your systems such that you can confidently ensure the following:
- Your supply chain can handle spikes in volume. Back order situations are costly in terms of lost or canceled sales and increased customer service touch points.
- Your product contains easy to follow setup instructions, preferably annotated with large color images.
- Your customer service team can quickly address customer issues within minutes. Any wait for service longer than "same day" is becoming increasingly insufficient in today's markets.
- Your customer service team is available during extended hours, preferably 24 hours a day, 7 days a week. The resulting increase in sales and reduction in your returns rate will likely offset the cost of operating during such hours.
- Retailers' sales reps can adequately address customer questions. Provide in store demos and training materials to sales reps. Take responsibility for sales numbers at the store level. Do not rely on the retailer to adequately communicate the benefits of your product without prior training. The same is true for online resellers as well.
Example:
Customers will call on you or the retailer they purchased your product from to answer questions and address issues that are going to alter their perception of the product's value in one way or another. Have you provided accessible tools for your customers to "self-correct" the problem? Have you provided your retailers' sales reps with the tools and information needed to adequately dissuade returns?
In short, provide the needed support to save the customer's day, save the sale, and save yourself from a potential customer relations failure.
Despite your best planning in anticipation of the majority of hurdles customers will encounter, you cannot anticipate every possible issue. Be agile and adjust accordingly when you discover the hurdles you did not anticipate.
Unforeseen problems in manufacturing such as faulty assembly and production delays are the most common examples of this scenario that our clients encounter. In general, turning bad news into an opportunity for positive touch points with your customers is a great way to manage these situations.
Example:
A customer calls with a request to fix a previously unknown issue he/she is experiencing. Give your customer service reps the resources and latitude they need to quickly adjust and fix the problem before it results in a return. Also make sure that the rep has a way to escalate the issue to your technical staff for further evaluation. If the problem can be replicated and identified, you may have a chance of improving future production runs to avoid seeing the same problem again.
Example:
Your manufacturer has promised delivery by the end of September. What happens when the date is delayed? Have you told customers to expect their orders to ship by the end of September or have you promised shipment "this fall"? Give yourself a margin of safety so that you can comfortably beat expectations. As the date shifts forward or backward, keep your customers informed with periodic email blasts as information becomes available. This is a great way to set and beat expectations. This is also a great opportunity to retain visibility in front of your customer base.
Example:
UPS has lost your shipment intended for use in tomorrow's airing of a major television show's product review segment. Can you quickly send another unit out the door in time? Do you have the ability to ship overnight if you receive the request at 5:00pm? Do you have the ability to ship via same day courier if you recieve the request at 9:00am on the day of the show?
Do what you promise to do. Set customer expectations and deliver accordingly.
Meet and exceed customer expectations 100% of the time. Live up to your promises in terms of delivery times, warranty and return policies, customer service, and technical support. Does your fulfillment center promise same day shipping? Set the expectation with your customers of a lead time of 24 to 48 hours. You never know when a rare oddity in an order may cause a delay.
Example:
A customer enters an order requesting shipment via UPS Ground to a post office box, will you still be able to meet the customer's expectation for delivery, even though the customer made an error? The ability to make a quick adjustment by either contacting the customer or automatically switching to a USPS shipment method will still allow you to meet and exceed the expectations you have set regarding order delivery speed.
Example:
Your manufacturer has fumbled the printing of sequential serial numbers on the product packaging. The customer support team is dependant on tracking these numbers in order to service your customers. What now? Make sure you have the resources in place ahead of time that will give you the agility needed to quickly analyze alternative solutions.
Example:
If your hard work pays off, customers will quickly begin to rely on the utility and enjoyment of using your product. Through your great work as a product designer, developer, and marketer you have set an expectation of quality and performance in the customer's mind. In the event that a product is not functioning correctly, can you effectively fix the issue remotely with your customer service team and/or replace the defective product in the customer's hands with minimal interruption to the customer's use of the product?
Let's take a real life example from a recent article published by Brian Lawley, President of the 280 Group, where he discusses his reasons for returning his Palm Treo:
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I've been a Palm user for over ten years, including owning several Palm Pilots and Treos. The Treo has met my needs for years, but I haven't been entirely happy. Once when the Treo stopped working it took them 10 business days to get me a replacement (since I run my business on my cell phone this was ridiculous - particularly since the Treo is a premium-priced product). Read the entire article here.
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Despite his credible claim that he was a loyal Palm customer, as well as his stated opinion that his Treo was a terrifically designed and built product, Mr. Lawley eventually returned his Treo and switched to the Cingular 8525 Smartphone as a result of this poor customer experience. In this case, Palm's failure to retain this otherwise loyal customer was the result of several fatal errors.
First, in the customer's mind, Palm did not live up to its previous track record of providing products that are essential to any business professional's success in today's mobile business climate. If a product is an essential tool, a business professional should not be asked to live and work 10 days without it.
Palm simply failed to acknowledge that its well established success carries a great deal of responsibility in the minds of its customers. In this case, a breakdown in communication meant that operations did not meet the expectations set by marketing's successful branding.
While Palm created a method for replacing the phone within 10 days, the only way to help the customer successfully jump the hurdle in front of him would have been to build an exceptional advanced warranty replacement solution capable of an overnight turnaround. Had Palm anticipated this situation or adapted quickly enough through the use of such a solution, Mr. Lawley, and potentially thousands of others in his shoes, would still be active Palm customers.
Successful product management is dependant on the whole product solution, both in terms of function and customer interaction. The 280 Group and Rush Order provide first-rate outsourced capabilities in these areas, ensuring that your customers enjoy using your products and interacting with your organization.
A blend of exceptional product development, successful marketing, reduced overhead, increased sales, and happier customers are a recipe for success that our respective companies fully understand and execute every day.
If you are interested in obtaining additional information about the operational aspects of this topic or interested in a joint end to end solution by leveraging both companies' services, please contact me at dana.madlem@rushorder.com or by calling (800) 522-5939.
If you are interested in obtaining more information on the 280 Group and its product management and product marketing expertise, please contact Brian Lawley at contact@280group.com or by calling (408) 834-7518.
When utilized as stand alone service options or combined as a single integrated end to end solution, Rush Order and the 280 Group are proven experts that provide the right mesh of marketing and back-end operations that will deliver the right experience to you and your customers.
Sincerely,
Dana Madlem
Business Development Manager
Rush Order, Inc.
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