August 5, 2015 at 3:23 pm | Blog
The N.Y. Post recently recounted the woes of Broadway bombs and the reason for their business bruising. Not unlike every business, they need to keep costs under control, know who their target audience is beyond a doubt, and market in the right medium (venue). A stunning fact: 80% of Broadway shows end up with red ink. Broadway shows can take years to mount and often get carried away with production costs. Spider-Man cost $80 million to mount, grossed $1.5 million a week, but its cost structure required it to average $1.5 million every week for three years just to break even.
Imagine if the business world operated with those odds. While most businesses are much more disciplined, many are often rushing to market with a new idea or new product before validating the target market’s receptivity to the product. Except for their Off-Broadway runs, very few shows get sufficient testing. The same is true for mid-market companies. Fewer than 5% of mid-market CEOs report conducting any level of customer research to determine if a launch of a product or service warrants the expense of the rollout, or to determine what customers value. They are so eager to get the new product on their marquis that customer validation is skipped 95% of the time. Often, large companies do the research but frequently ignore the results. Does this sound like good business?
If your company has been down this road, remind each other that some homework needs to be done before your next debut. Minimize your risk with some solid Voice of the Customer research.
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