Manufacturing companies are often looking for ways to develop new products and enhance existing ones. When this happens, they often start by asking themselves technical questions: How will it work? What materials will we use? Can we build it? How much will it cost?
There are many good reasons for this. For one thing, most manufacturing companies have staff with strong technical backgrounds that feel comfortable asking and answering these types of questions. In addition, these questions also tend to have concrete, objective answers. Finally and most importantly, answers to these questions are mandatory. A company can’t move forward with a new product if they don’t know whether it will work.
But there is another set of questions that these companies often overlook. What companies tend to miss are the commercial questions, such as:
· How big is the market?
· Do our customers want the features that are being offered?
· How does it compare to competitive offerings?
· Does the new product offer too many or too few features for the price?
· Does it fit within our existing portfolio?
· Is it aligned with where we want the business to go?
· Is there a better alternative to invest in?
Unlike technical questions, these commercial questions may be harder to answer. Companies may have fewer staff qualified to weigh in. In addition, there may be a high level of uncertainty and possibly disagreement about the correct answers. The complexity of commercial questions tempts many companies to simply ignore them.
But just because a company can ignore these questions doesn’t mean they should. Commercial questions allow companies to be more strategic by forcing them to choose what is in the best interest of their business.
Companies that forget to address commercial questions, in contrast, often end up launching new products that underperform, accepting low margins, and struggling along without seeing real progress. Often, that’s because these businesses focus on the questions they can answer instead of the questions they should try to answer.
How can a tech-focused company ensure they are asking the right commercial questions? There are a few key ways they can adopt a more commercial focus:
· Make it part of the process. Companies should schedule meetings at key milestones in the product development life cycle to address both commercial and technical concerns. If they can’t adequately answer commercial questions, further technical development should be put on hold.
· Invest in getting answers to the commercial questions. By talking with customers and conducting research on competitors, companies can determine which products may be most likely to succeed. It’s never too early in the product development cycle to start thinking about marketing—just ask Apple.
· Have an advocate. For commercial questions to get priority among a sea of technical considerations, they need someone who will keep asking them. This could be a general manager, a marketing professional, a head of sales, or a product manager. A part-time marketing executive can also fill this role.
Whatever approach a company chooses, they should find a way to ask commercial questions every time they consider a new product. Doing so will help them think more strategically, create better products—and be better positioned to grow.
