You only have to take a look around in this economy to see how important new ideas are. People who were riding high two or three years ago have suddenly found themselves in trouble. This is not only small business owners but also individuals. I recall about three years ago a successful business woman, admired for her leadership and energy, who told about her long road to success. It was an inspiring talk and had the crowd at the gala dinner event were enthralled. Now, sadly, this same highflyer is without a job.
Demand for products and services ebbs and flows. Sometimes you are in the money and sometimes out of it. Something that was fashionable or trendy only a few years ago is now tired, worn out and not in demand.
This is one reason why new ideas whether you are in business, the arts, entertainment or even working in a not-for-profit organisation are crucial. You need to come up with new ideas, new approaches, new concepts. These are the things that drive progress forward and help to create new demand.
Let’s go through a few aspects of important things to evaluate when you have come up with a new idea.
One is coming up with a product or service that provides an advantage to a customer. You need to find out how customers are presently addressing their need. If yours is better in some way or provides a new twist, you could have the right solution at the right time.
Another area to consider carefully is who are your customers. You can’t just aim for the general population but need to target a specific customer group or niche. You will need to know they motivate as, psychographics and demographics. Basically, you need to know what interests them and discover their propensity to buy.
Knowing the competitive landscape is also important. You need to have an idea of the competitive intensity of your market and find an area where competition isn’t strong. It’s no easy task and you need to be strategic in finding potential customers that your competitors may have ignored or are neglecting.
An area that I need to emphasise is your product delivery system. If you are going to be held over barrel by distributors or retailers, you will need to think of a different strategy. Whatever product or service you deliver if it is through and intermediary or middle person, you can expect they want their cut. A small specialised business I know which processes smoked meats and other foods can’t or won’t stock his products in delicatessens because the delis want so much margin that it drives his price up to high, throttling demand.
Many factors need to be evaluated before a new product or service is entered into the test marketing phase. But, as promised, the most crucial one is customer demand. Without customers to buy your product or service, you don’t have a business. You can have a fantastic product or service but if you don’t have a critical mass of customers, then all your plans will turn to naught. It’s a hard area to estimate but you have to do your homework when it comes to projecting or assessing customer demand. A growing demand with growth potential could well give you the green light to go ahead. But you had better make sure that your estimates of market size and propensity to buy are as accurate as you can make them.
Even the hottest salesperson won’t be able to sell to customers who don’t want to buy or can’t buy. Make sure you do a thorough analysis, using the best information and data possible, of your projected customer demand before you start cracking open the champagne to celebrate what you think is going to be a successful new product or service.