Product/Technology Launches

I use Friday, March 13th, 2020 as the official start date of the COVID crisis.  Looking at the calendar, we are pushing toward

the one-year mark of this little Global Pandemic.   Much has happened in our industry during this time.  For the first couple of months, we hunkered down expecting the winds of change to sweep this virus off to the side.  Optimistically, most of us felt the storm would pass by end of summer.  As the reality of the situation persisted, we carried on and survived.  Distributors found new and innovative ways to keep in touch with their customers.  Sales turned in an upward direction and businesses who were once down 30-40 percent versus pre-COVID times managed to end 2020 with a much smaller downward trend.  A few even managed to eke out a narrow margin of growth.

I believe one thing fell to the wayside through all this illness and mayhem, that being full-blown product launches.  

Amidst all the other struggles, most distributors have barely noticed, but our supply partners have felt the pain.  Important and promising new products for which the manufacturer had high hopes languish in a never-land of slow or nonexistent growth.  This presents issues for both our supply partners today and distributors in the future.

Over the years, I have heard several distributors say something to this effect, “Over 30 percent of what  we sell didn’t exist five years ago.”  I know firsthand this statement is true in the Automation segment, and suspect it is true throughout most lines of trade.

There is a need for and probably a pent-up demand for new products and the product launches required to bring them to market.

Product Launches are expensive

Developing and later bringing a new product to market is expensive for distributors and suppliers alike.  The cost structures are different, but the financial impacts are similar.  

For manufacturers, the major costs are fixed.  They invest in research, product development, design, manufacturing equipment, and all the other things long before the product hits the streets.  Thinking more, the money for next year's products is probably already spent.  

Contrary to the “build a better mousetrap and the world will beat a path to your doorstep” philosophy, the products do not sell themselves.  This is where the distributor steps in.  Consider the costs of training a salesforce, buying demos, creating and executing a local marketing plan, finding new applications, and supporting the initial sales.  This is a massive financial outlay for any company.  

Together, distributors and their partners must get this right

The costs and the stakes are high.  This is not something distributors and their suppliers can just push into without some planning.  Most have a semblance of a plan, but there is no master plan shared between the two groups.  Before the Pandemic, we asked a group of distributors and suppliers to rate the efforts of their partners in important launches.  Most gave their combined efforts a grade of B- or C. While these are passing grades, the ratings do not bode well for an industry revolving around new product development.

To give this a bit of flavor, allow me to share some of the issues shared by both sides:

Distributor comments:

• “One of our best suppliers gave us exactly two weeks’ notice on their need to launch a new product.  Do they think we have nothing else on our calendar?”

• “They scheduled a major product launch, lined up a half-day meeting, went through the whole shooting-match only to announce the product was on hold and they would not be shipping for 4-6 months.  By the time the stuff was ready, my team had forgotten most of the information and training.”

• “One of our smaller partners has some cool products, but they are mostly a niche line.  They have asked us to devote several days of training to their new product.  The opportunities in our territory are limited, maybe $100,000 in potential sales.  They don’t understand the payback for us would never cover the associated costs.”

• “They did a product launch to all 25 of our salespeople.  It lasted a full 90-minutes.  Instead of teaching us how to sell their product, they devoted nearly an hour to new breakthroughs in their factory and manufacturing processes.  I tried to break them out of this story and onto the product a couple of times, but they were devoted to bragging about their accomplishments.  It was a complete waste of time.”

• “The supplier sent a couple of factory guys out to launch the product to our team.  During the meeting, it became evident their local guy had never seen the product.  After the meeting, he told our guys he could not help much with the product until he received additional training in a couple of months.”

• “The regional manager called to pressure me for an initial stock order for their new product.  He was surprised to learn nobody on our team had even seen the product”.

• “Big launch, great training, but they had no literature or demos to leave behind.  This is a big letdown.  We are good, but how are we going to sell the product without any tools?”  

Supply-Partner comments:

• “We get lots of commitment out of the distributor sales manager, hold a meeting to equip the team with the right tools, then nothing happens.”

• “We try to set up joint calls to help push the launch forward but can never get the sellers to commit to making a joint call.”

• “We did a launch meeting and left a couple of boxes of literature and several hundred dollars’ worth of samples.  I came back to the distributor two weeks later and all the materials were sitting in a pile in the back of their training room.  Somehow, I wonder if a single call was made.”

• “Part of our launch was the targeting of some high-potential accounts.  We asked the sales guys to send us a list of their targets so we could help in their efforts.  We received targets back from one salesperson out of 18.”

Trust me, this list could be much longer.  But you get the point… We have a breakdown.  

The Pandemic end is approaching 

Finally, with 40+ million vaccinations administered and 100 million forecasted by the end of March, the end is coming into view.  Along with this progress, customers will be more open to sales calls, and distributors more likely to be receptive to the activities tied to a launch.  

A good launch requires planning.  Planning that could be conducted via video conferencing.  If ever there was a time when we need to hit the ground running, the time is now.  

River Heights Consulting is tracking launches and would like your feedback.  We have prepared a whitepaper with thoughts and guidelines on best practices for a powerful and effective launch.  For a limited time, it is yours for free if you take our short six question survey.   Take the survey here.