Harbingers of Failure

When This Customer Buys Your Product, Your Product Will Fail

#Customers

Wed, May 7th, 2014 12:00 by capnasty NEWS

The Kellogg School of Management at Northwestern University has this rather bizarre article explaining how researchers determined how well a product will do not only by the number of units sold, but also by who buys the product. Reportedly, if the so-called Harbingers of Failure flock to it, your product will fail.

“It’s important to remember: the products we’re looking at are ones that got very far through the pipeline,” says Anderson. “These are products where a manufacturer went out, they did concept testing, they talked to customers, they brought it to retailers, the retailers piloted it in their stores. The retailers said yes, it’s a product we want to roll out to our entire chain—and then it doesn’t last very long.”

Despite this lengthy process, the researchers found that just 40 percent of new products are still in stores three years later, a number in line with previous estimates. But critically, a product’s chances of succeeding depend not only on how much is sold but also on who is buying. The surprising finding is that when sales increase to a segment of consumers whom the authors label “harbingers of failure,” then the new product is more likely to fail. This finding contradicts nearly every metric of new-product success: How can more sales signal that your product is about to fail?

But sure enough, there is a very real class of customers who are uncannily attracted to products that will never catch on. Take, for instance, Diet Crystal Pepsi, a notorious product failure. Customers who purchase a product like this are also more likely to purchase, for instance, Frito Lay Lemonade, another product that eventually failed.

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