This Is A Crazy Way To Screen New Product Ideas But It Works

the secret to NPD assessmentTo improve the speed and success rate for your New Product Development (NPD) and innovation activities, you need to:

  1. Start with a good idea (customer need)
  2. Successfully develop the solution
  3. Successfully implement the solution

Since there are no guarantees as to which ideas are the “good ones,” the challenge is to evaluate the various ideas and determine which ones we should resource.

You should create an Idea Generation Checklist to help with this assessment.

The secret isn’t filling out an idea generation checklist – it’s step #2: Write an ad

The checklist has four key areas:

1. Description of the Idea

Briefly describe the suggested idea and its benefits.

2. Write an Advertisement

Turn your product innovation into an ad to powerfully share your visionThis is a unique section and the secret to success. As soon as you have an idea, turn it into an ad. Every new idea should start with an ad or a picture.

An ad is the language of marketing. It literally paints a picture. You don’t have anything to talk about until you put your ideas into an ad.

In the act of writing the ad, you force yourself to start developing the idea. What is the main benefit of the product? You can’t write a headline without answering that question. What about name? Package? Main selling points?

This ad isn’t meant to be polished or a test of anyone’s creative or artistic ability. It can be a hand sketch, or a cut & paste from something, it doesn’t matter.

3. Assessment of our Technical and Commercialization Capabilities

This section is a checklist of items. The objective is to estimate of our “Probability of Success” both technical and commercialization, as well as how much effort it will require.

Here’s a way to create an overall evaluation for initial screening.

Commercial                        High       Medium      Low

Probability of Success

Amount of Effort

Cost to Implement

Technical                             High       Medium     Low

Probability of Success

Amount of Effort

Cost to Develop

4. Assessment of Financial Viability

At this early point, the analysis is simplistic: what’s the current market pricing for competitive products. Next determine the margin level need by your customers. Layer in your margin requirements and customer loads to quickly back into a cost target. If it passes the sniff test, there is still a green light at this initial stage.

Turn your innovation concept into an ad to powerfully share your vision

the secret to NPD assessment and, ultimately, commercialization successA picture is worth 1000 words. Nowhere is that more true than when you are trying to powerfully communicate a new product concept.

It articulates the vision of the idea clearly for everyone at the screening stage and sets the stage for a more compelling commercialization.

Good Selling!

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A New Way To Budget For Marketing In 2016

“I know that half my advertising dollars are wasted, but I don’t know which half”

make your marketing dollars work harderSound familiar?

For decades, companies have tried to make their marketing dollars work harder. They have used concepts such as target marketing, niche marketing and positioning to help build sales by generating leads, reaching decision-makers and even asking for the order. But a problem remains: marketing and sales have never been completely coordinated.

The result is that money is allocated to marketing because everyone knows marketing is necessary. And sales people are told go out and sell because most B2B products and services are sold that way.

This approach has worked in the past, but the changing business climate will continue to force companies to re-evaluate the entire process. To borrow a buzz-phrase, tomorrow’s marketing will have to work − not harder − but smarter.

Instead of basing the marketing budget on projected sales, the sales requirements can be used to establish a zero-based approach

In this way, the actual point when the sale is closed determines what materials and how much should be spent to make the direct selling effort as cost-effective as possible.

Cost Effectiveness of Direct Selling Worksheet

The first step is to determine the total cost for your entire sales force, and then the average cost-per-call and cost-per-sale. (At this stage, do not factor out individual salespeople). The chart to the left will help you calculate this.

The resulting numbers are a measure of your current marketing efficiency, arid will serve as a gauge of the cost-effectiveness of your total future program.

Next, using the chart below, break out your new accounts and those you have had for at least one re-order. Depending upon market factors, you may also want to break out the accounts by region, season, or some other criterion.

Cost Breakdown by Account TypeWhat you are measuring here is the cost-effectiveness of your existing direct-selling effort, looking for the types of accounts which are most profitable and those which are least profitable.
As a general rule, your marketing depends upon the profitability level of each category. Those categories where direct selling is very profitable should have programs designed to support the sales person, helping to either increase the dollar volume per account or lower the average cost-per-sale.

Those categories where the profitability level is low should have programs designed to replace the sales person as much as possible.  This can be accomplished effectively with programs such as automated marketing to lower the cost of pre-qualification inquiry fulfillment.

Once you have determined the coA New Way To Budget For Marketingst-per-sale for each category, you should establish sales objectives. The first is to maximize a sales person’s productivity and to do that requires establishing the prime job function:

  • Developing new business leads
  • Making presentations
  • Maintaining face-to–face contact at existing accounts
  • Trouble-shooting problem accounts

Obviously, some or all of these functions could be present in all categories, but by assigning the sales person a prime function, you are taking the first step in determining:

  1. Better way to budget marketingThe type of program (support vs. replacement) that will result in a lower overall cost-per-sale
  2. The message that each component in the program should carry
  3. The amount to be spent to deliver the message(s)

Given this information, you are now in a position to correlate all your marketing, advertising, promotion and direct selling expenses to sales.

Program effectiveness can now be tracked. And you can begin to consider your marketing spend in terms of its contribution to profits…instead of just cost of sales.

Good Selling!