If you’ve seen my last video about how having a lot of product options can actually decrease the chances that you make a sale instead of increasing them, you may have been surprised. After all, intuition tells us that the more options available, the more likely that a potential customer finds what he’s looking for.
So, let’s stick to the counterintuitive theme for one more video, and go over 5 counterintuitive product development mistakes that you might be making, and that will hurt your business.
Now… since I’m talking about counterintuitive mistakes only, I’m not going to go over things like:
Common product development mistakes:
- building poor features,
- not being able to differentiate from competition in a positive way,
- not validating the product idea with potential customers,
- getting into a market you don't understand,
- forgetting to consider marketing activities during the budgeting process,
- underestimating cash requirements in general,
- being in denial and refusing to listen to constructive feedback...
I mean… there are a lot of very widely known ways in which we can screw up product development; this isn't about that. These mistakes I’m taking about today would not be noticeable even if all the "traditional" product development advice regarding market validation had been taken into account.
So, let’s start:
Counterintuitive product development mistake no. 1: Building too many features (even if they’re all good)
This may lead to:
Marketing problems (since the product’s positioning or value communication story may become confusing).
Loss of profits (since you overspend resources on feature development and manufacturing), and even pricing problems (since people may get the impression that they are paying for a lot of things they don’t need, and that if they could only buy what they needed, the product could be cheaper).
Anyway, I have a whole post about the dangers of selecting the wrong set of features, which you can read if you want all the details.
Counterintuitive product development mistake no. 2: Offering too many product versions
While it’s great to tailor to specific segments' needs, if you have so many versions that it becomes hard for clients to identify which one would be the best suited for them, you can lead people into a state of analysis paralysis.
People become afraid of selecting the wrong option, which leads to purchase delay, and often, to not purchasing at all. After all, why risk making a wrong decision now, if it can be postponed or avoided altogether?
Anyway, I’ve covered this one in detail in my post about choice overload, so if you haven’t read it yet and want more details on this issue, make sure to check it out.
Counterintuitive product development mistake no. 3: Not offering product versions
Obviously, although having too many versions of a product can lead to confusion, having a handful to choose from can be a good thing. It allows you to target different customer segments. People ARE more likely to buy if they find a product that seems to have been designed with their exact needs in mind.
Having different versions becomes a problem when you have so many, that people can no longer understand which one they should be picking. But as long as we don’t go overboard with the number of versions, making it difficult for the customers to say “yes! That one’s perfect for me!”, then tailoring to different segments’ needs does help increase sales.
Besides, it’s been shown that having several versions of a product type increases the perception of brand quality. People seem to assume that you are more of an expert within that product class. That is, as long as you keep a consistently high-quality level throughout the product range, of course.
And while this one isn’t as obvious as to assume that a higher priced brand is better (which is also a common assumption), in practice, the outcome on perception regarding brand quality works in a similar way. Who would have thought? Our minds do play weird tricks on us, I guess.
And speaking of our minds and how they trick us, if you can’t have completely different product versions, maybe you can have different product tiers of one same product (or service; because all this applies to products and services the same way).
After all, it’s been shown that having higher priced options available increases the sales of the middle of the range ones. People just like to avoid the extremes (they don’t want the cheapest, nor the most expensive options).
Also, product tiers allow us to segment customers according to their degree of product sophistication needs, and willingness to pay.
Anyway, I will be publishing an in-depth post about product tiers soon. Unfortunately, it’s too complex to go over here, and we need to move on to…
Counterintuitive product development mistake
no. 4 (and this is a big one): Not assessing achievable price range before developing your product or service offering
The issue here is that a lot of people develop products to later find out that they cannot sell them, or that they cannot sell them at a price that can make them a profit.
This is more important when building products that require significant investment upfront, or ones that have a manufacturing cost per unit (as is the case of physical products).
The best strategy really is to define a target price at which the final product can be competitive within the target customer segment, and then develop a product that can be profitable at that target sales price.
This helps developing a product that is both commercially and financially viable.
Anyway, if you'd like more information about how you might do this, I'd suggest reading this post about 5 questions you should ask to assess achievable prices.
Counterintuitive product development mistake no. 5: Not testing your value messages with potential customers before developing your product of service offering.
Yes, this may sound a bit counterintuitive; after all, why worry about our sales copy before having anything to sell? I know. But hear me out. This is a lot more important than it may sound at first. Because the point isn’t only to develop great sales copy; the goal of this activity is way deeper than that.
You see, this helps us not only identifying our products’ core selling points, but also potentially identifying different market segments, and what the customers really value vs. what we assume that they do.
Doing it before full product development helps prioritize feature selection, version definition, and potentially lead to adaptations to our envisioned final product.
Anyway, these are the 5 non-evident product developing mistakes that I come across more frequently. I’m sure you probably have come across a few more.
And see you in my next post, where I’ll go over why you shouldn’t be afraid of charging premium prices. See you next time! Bye!