Every year, thirty thousand products are launched and 95% of those products fail. With those odds, businesses risk wasting a ton of time and resources if they don’t get their new product right.
To beat the odds, you need to define your target market, consider risks and ensure you have the right product fit. Armed with a marketing and sales plan, you can sell better, close more deals and boost conversion rates.
In this article, we’ll break down how to sell a new product. Follow these six steps to prepare your business for a successful launch.
1. Define your target market by conducting new and existing customer research
Before building and working out how to sell a new product, find out if there is a large enough need for it.
As part of your research, talk to your existing customers to figure out how new product ideas can help them solve existing or adjacent problems relevant to why they’re already investing in you.
Then, start thinking about who exactly you’ll be selling the product to. Identify your target audience by defining:
Your ideal customer (e.g. occupation, age, location, company worth, etc.)
Their needs (e.g. what problems do they have that your new product can solve?)
Product fit (e.g. will your new business ideas actually help them?)
If you don’t define these foundational target audience criteria, you risk wasting your time and resources developing a product that no one wants or needs to buy.
Next, assess the potential for your product within your target market:
Potential sales. Calculate whether the costs and risks to market and sell the product will outweigh the profit from forecasted sales. This will depend on your target market size. Calculate your total addressable market (TAM), your serviceable addressable market (SAM) and your serviceable obtainable market (SOM).
This market research and strategic thinking will give you a realistic perspective on whether or not your new product is worth the risk in your target market.
2. Account for operational hurdles of selling products
One of the biggest operational hurdles you’ll have to overcome is the demand on your team’s time. When selling a new product, or product line, you need to account for this increase in time spent selling.
Innovative products will require more sophisticated selling. Reps will need more training to understand them and sell them effectively. They’ll also spend more time with customers showing them how it works. Your sales reps may take more time than with established products to build trust and reinforce the product’s value with use cases and demonstrations.
Your marketing team will also play a role here. Creating and publishing helpful how-to posts on the company blog and hosting webinars are helpful ways to educate potential customers and make them feel comfortable with your new product.
We’ll dive into how you can train and prepare your reps to effectively sell new products in step five.
A final way to gain back time is to automate as many menial tasks as possible. Automations can save a ton of time spent on low-level tasks like updating lead scores or deal stages. Help your people spend time on important jobs, like building relationships, by outsourcing tasks to automation assistants.
3. Create a marketing plan and map the sales process
A successful marketing and sales strategy involves defining the new product’s goals and what actions you will take to achieve them.
A sales plan explaining how to sell new products should include:
Sales team structure. If you’re selling to a brand new market in a new territory, map out what your sales team will look like and its organizational structure. This will include roles, responsibilities and compensation for every sales team member. If you’re selling a new product to the same target market and audience, especially if it’s a technically sophisticated product, define who will need to be involved in the sale (e.g. a sales engineer) and what stages in the sales pipeline you’ll need to bring them in.
Goals. Create revenue goals and calculate sales targets based on past sales activities and performance. Use this section to break down pipeline stages and rep activities across the customer journey. Include detailed information about sales targets (e.g. quotas and metrics), revenue goals and the number of sales reps you’ll need to reach them.
KPIs and performance tracking. The metrics and key performance indicators (KPIs) your team will be measured on once they start selling the new product. Include how performance will be measured, KPIs within each sales stage and if you’ll be using sales tracking spreadsheets or software (like a CRM) to track wins.
Once a basic sales plan has been created, you need to think about your sales strategy. Your sales strategy will tie your activity-based goals, results-based goals and positioning to methodologies your team will use to sell the new product.
For example, you may want your sales team to make X number of cold calls per week to potential leads and prospects or hit a certain lead-to-appointment rate in the first 12 months.
No matter your specific goals, make sure to map them to your existing sales process to ensure it aligns with your current workflows and sales pipeline stages. If not, you’ll need to fill in the gaps to ensure your process for selling your new product or solution is optimized for efficiency and success.
As soon as your sales plan and strategy have been created, think about when you’ll be ready to sell a minimum viable product (MVP). This is the first version of your product with core functionality you can release to customers.
Your MVP isn’t a finished product because it can be risky and expensive to invest in the product’s features without getting feedback and surveying early adopters first. Once you have this information, you can tweak the solution so it’ll be a better fit for your customers.
Consider these points when developing your MVP:
Cost. When will your MVP be ready and how much will it cost to develop?
Entry-level price point. Settle on a price point to sell your MVP that’s competitive with the rest of the market.
BETA or not to BETA. Decide if you will offer your existing customer base the MVP for BETA testing. This way you can gather detailed feedback before releasing it to the wider public.
With your sales plan and process mapped out, you’ll now need to prepare a sales and marketing budget.
4. Accurately determine a sales and marketing budget
Before you start selling your product directly to end-users, you’ll need to calculate how much your company is willing to spend on sales and marketing.
These budgets should cover every activity involved in launching the new product, from marketing and advertising to MVP testing and any initial sign-up discounts or product offers.
Let’s start with the advertising and marketing strategy.
A report by Experian states that new businesses typically allocate between 12% to 20% of their gross revenue to spend on marketing. This is split between brand development costs (e.g. promotional channels like your website, social media accounts, blogs and sales collateral) and direct marketing campaign costs like advertising campaigns, SEO and trade events.
Next, think about your sales budget.
Use your existing sales data to get a rough idea about costs and timelines. A typical sales budget will cover weeks, months, or quarters and consider sales cycle lengths and staffing costs.
Drawing on past sales data should give you a rough estimate of revenue and cost. The budget should also break down expected sales within a certain timeframe, the price per product and total overall revenue. Calculating these figures will give you a better idea about how much your sales activities will cost and how much money you have to work with.
Don’t forget to include any basic operational costs associated with marketing and selling the product. These include:
Operational. How much it’ll cost to create and ship your product.
Staff. The money you’ll spend on employees, including bonuses and compensation for sales reps.
General business expenses. Software/hardware, building rent and utilities should all be included here.
Remember, your team will be selling a new product, so it’s essential to train them about its features and use cases.
5. Prepare your team with in-depth training
Selling a new product will only be successful if your sales reps know it inside and out.
Decide what training your reps will need to sell the new product depending on its complexity, features and price. Work with your product teams to understand the problem it fixes, why it’s useful and how to pitch it to customers in the best way.
It’s crucial to get your sales team excited about the product and its differentiators, as it’ll help them sell it confidently to customers early in the sales cycle. This will also require the sales rep to understand the product’s features and how it can help the customer overcome their problems and pain points.
Your in-depth training should cover:
Background knowledge. Give your team as much information as possible on the product’s development and use cases. Suppose the new product is email marketing software. In that case, your reps need to understand the basics of email marketing and confidently use industry-specific terms and phrases in their customer conversations.
You should also expand your training to other areas of the sales training process, like how sales reps should qualify leads and handle objections.
You can get a head start with these training materials by using existing information from past product launches or finding free sales courses online. For example, Pipedrive Academy has online video training courses that teach sales reps techniques to overcome objections. The training shows reps what to do when they hear common objections in the early stages of discovery and ensure that the lead is a good fit for the product.
Here’s an example that’s also available on YouTube:
6. Measure success and create sales and marketing feedback loops to improve
Once your team is prepared and your product has been released to the public, track the success of your sales and marketing efforts.
Tools like product surveys and feedback forms will help you tweak the product after its initial release. You should also collect testimonials from early adopters to make ongoing improvements and use success stories as social proof in marketing efforts.
Some metrics will prove useful when measuring the success of your new product. Basic KPIs to consider measuring are:
Average customer lifetime value
Net promoter score
Deals won vs. deals lost
New customer revenue vs. revenue from existing customers
Selling costs vs. revenue earned
Growth over time
In addition, specific metrics like the number of new product trials and engagement rates are especially useful when measuring the success of a new product:
Product engagement rates. New trial statistics don’t always tell the full story, which is why it’s also important to track how customers are engaging with your new product. If engagement levels are low, it could indicate a lack of features or a UX problem that’s impacting their experience and needs to be fixed.
Lead acquisition. Tracking lead sources and close rates are also a great way to measure how effective lead acquisition and marketing channels are and decide whether you need to move resources elsewhere. If your marketing team realizes that most of your new clients are coming through Twitter, it may decide to move some advertising budget from another channel that isn’t performing well in order to boost revenue even more.
Using a CRM tool like Pipedrive, your team can also measure activities that directly impact the goals you’ve created for selling your new product.
For example, managers can track how efficiently their salespeople are performing compared to the goals outlined in the sales strategy. If individual reps are expected to make 100 cold calls a week or book ten meetings a month, their efforts can then be compared to the original goals.
With the odds stacked against you, it’s crucial to prepare your business for launch.
You can do this by investing time into reading up on your new market and researching your target customers and creating a sales strategy that ties your revenue goals to your product. With the proper training, your sales and marketing teams will also know how to sell new products confidently to new customers. If you need expert advice, why not try reading a sales book from an experienced seller.
Measure your efforts and ask for customer feedback so you’re always improving your product. Tweaking your product in the early stages of release and adding desirable features can help make your launch a success and boost your bottom line.