 In my consulting work and from speaking to inventor and entrepreneurial groups there are a number of common mistakes that often cause major setbacks, delays, or even failure for many start-up organizations or new product initiatives for existing companies. Avoiding these common business mistakes will dramatically increase your chances of success.
- Making a product before you know you have a market.
Inventors often become obsessed with an idea and spend untold hours or even years working on the development of products or prototypes only to discover when they finish that no one wants their product or is willing to pay enough to make it profitable. Make sure you do the appropriate research to understand for who, where and when and how your product will have value. Don’t offer a product or service just because no one else is doing it. There is a lot of Friday Night Fish Fry’s in Wisconsin because people like them. Offering roasted striped artichokes may be a different alternative but it won’t guarantee that people will beat a path to your door.
- Pricing a product too cheaply.
Just because you can make a product easily or inexpensively doesn’t mean that your customers can. Consider what the real value of your product or service is to your customers and price it accordingly. It is always easier to go down in price than it is to go up. Never lower your price to a point where you begin to make people question the value or quality of your product or service.
- Selling to the wrong audience.
Lots of time and energy can be wasted making presentations or advertising to the wrong audience. Establish a clear picture of who your best prospects are (not just who you are currently selling to) and concentrate your energy on communicating how you can help solve their problems or make their life easier or more enjoyable. Your time is valuable; spend it carefully where you will get the greatest return on your investment.
- Not spending enough time on presentation or packaging.
Just because you understand your product or service inside and out does not mean that your prospective customers will. Think of your offerings in very simple terms. Pretend you were a six year old. How would you describe what you do or offer? Can you describe it in a few easy to understand words or phrases? Make sure all of your communications deliver a benefit in clear easy to understand language.
- Over promising and under-delivering.
Don’t promise things you can’t deliver. The truth will be known soon enough. If you can’t make a delivery date you should not promise it. Don’t advertise or promote your product before it will be available. Advertising and publicity done too early will often be forgotten before the potential customer can buy it and could give potential customers negative feelings towards your product or company.
Don’t claim to offer a benefit that you can’t deliver on just to make a sale. If your product or service does not deliver you may get an initial sale but will not get repeat customers and your reputation will be ruined for future offerings.
- Building in features that customers are not willing to pay for.
Just because you can add a feature or benefit to a product or service initially doesn’t always mean that you should. Only add those features or benefits that customers are willing to pay for. Trying to deliver the perfect product or service may cause you to be late to market and leave room for competition. While you are waiting for the perfect product someone somewhere will be coming up with other improvements or changes. If you always wait until you can react you will never get to market. Adding additional features or benefits periodically at later times gives you the opportunity to adjust pricing and keeps the competition off guard.
- Spending on advertising because it is seen as “cheap”
Business owners sometimes buy an advertisement because it seems cheap compared to other forms of advertising. Just because a certain type of ad is relatively inexpensive does not mean that it will work for you. Consider who your audience is and what sort of interest they have and what publications or media do they use and enjoy. An expensive ad in a targeted media may be much less expensive in cost per sales delivered than a less expensive alternative.
About the Author – Scott Francis is President of Topline Development LLC a Strategic Marketing Consulting Group that provides helps companies determine how they can make the most amount of money with the least amount of resources. To learn more about Topline Development LLC visit their web site at www.ToplineDevelopment.com or contact Scott directly at scott@toplinedevelopment.com. |
