You’ve spent a lot of time and money developing a brand new product that you recently launched. Now, you have to see if it was successful or not. Was all of your hard work and dedication worth it?
Figuring out if a product is successful can be difficult as there are lots of things that might indicate success. Today, we run through some of the key elements or metrics you should analyze to see if your product was a hit or miss!
Sales figures
Sales figures do a good job of demonstrating how popular your product is when it’s released. Businesses will often look at the initial sales figures as an indication of a product’s success. If your new product starts selling like wildfire, it means that people are interested in it. There’s a huge demand for what you’re offering, so much so that you run out of stock within a few hours of the launch.
However, you should also take the long-term sales figures into account. A product might sell well initially, but is it still successful if it sells poorly for the remainder of its time on the market? Generally, a good indication of a product’s success through sales figures is if it manages to sustain some good figures throughout its lifespan.
Furthermore, sales figures do need to be taken with a pinch of salt. As we move through this post, you’ll see other metrics that should be used alongside the sales figures to get a clearer picture of a product’s success. The next thing we’ll touch upon is often something you need to use to keep the sales numbers in context.
Profit margins
Yes, you want to see your product sell well, but your profit margins should also be taken into account. If you see lots of sales, but your product margin is low or non-existent, it indicates that the product isn’t a success. Well, it’s a big hit with the consumer, but there is clearly an issue with the manufacturing process that means it’s costing too much money to make the product. As a result, you’re barely making back what you invested, and it’s hard for you to actually earn money.
Needless to say, as a business, profits are crucial. Making money means nothing if you’re spending too much at the same time. So, when you view your sales figures, view your profit margins at the same time. A successful product is very easy to spot as it will help you increase your profits. Usually, this coincides with an increase in sales, thanks to the new product.
You could also argue that a product is successful if it indirectly boosts profits through the sale of other products. This product might not make much money, but it has drawn people to your business and you’ve seen a direct correlation between people purchasing this product and purchasing another. In this scenario, it’s a success because – although the new product itself hasn’t made a lot of money – it has directly influenced customer purchasing decisions to ensure that your business does have greater profit margins.
Takt time
If you’ve never heard of this before, it’s a phrase that originated in Germany and comes from the word takzeit, which means pulse or rhythm. In terms of product development, takt is a great way of measuring if a product is successful or not. So, what exactly does it mean?
Essentially, it is the time taken to produce a product that satisfies the customer. This means that you have done everything needed to make something that your customer is happy with. Consequently, you can measure the success of a new product by looking at the takt time. The lower it is, the more successful your product will be. This is because it means you have taken hardly any time to produce a great product that people like and see as valuable. Consequently, you’ve not had to pour too many resources into product development and creation.
Conversely, a product with a really large takt time is very rarely successful. This would mean you have spent lots of time, draining your resources, to finally get a good product. While the product might still be good, it has cost a lot of money and time to get to this point, making it harder for you to earn a profit.
Engagement
Engagement is another thing you can use to measure a product’s success rate. We can look at engagement in terms of how people engage with your business after the release of your new product. A good example of this is your web traffic data – does it increase after the product has been released? Do you see more site visitors than ever before, and are you able to generate more leads as a result?
Another example is your social media following – has it gone up since the product has launched? This is a sign that more people are engaging with your business, which can have long-term benefits. In essence, it means more people are interested in what you have to offer and are keen to learn more. Look at loads of other metrics as well – particularly those on your website. Are you gaining more email addresses because of your new product? Are you generating new customers? These things show that a product has caused lots of engagement, which is highly beneficial for a business.
Sales and making money are important, but engagement shows that you are getting people to stick around. This shows that your product could be a good long-term success for the company.
It was mentioned earlier in this post, but the true way to see if a product is successful is by looking at all of these things combined. On their own, these points might make you think that your product was good or bad. But, when you combine all of the points and look at how your product has affected your entire business and been received by the customer, it gives you a clearer idea of how successful it has been so far.