Your New Hit Product May Be Underpriced

December 03, 2016

underpriced hit product - simon-kucher

The odds are stacked against new products or services. Between 65% and 75% miss their revenue or profit goals, depending on whose research you look at. We have diagnosed thousands of product failures over the last 30 years, and have found recurring patterns. Often new products are over-engineered with too many features, usually at too high a price. Some products are truly innovative but stay walled up too long in R&D and then are released to market when they are no longer unique. Other failed products either answer a question no one cares about or are the wrong answer to the right question – Google Glass or the Segway personal transporter, for example.

But one innovation pitfall is particularly insidious because it doesn’t involve an outright failure; in fact, these product launches actually do well in the marketplace. But they don’t do nearly as well as they could, leaving big revenue and profit on the table.

We term these product launches “minivations” and they are the result of product developers who don’t realize just how much value their offerings would provide to customers. They then grossly underestimate how much customers would be willing to pay for them and charge prices far below what they could have charged.

Read the full Harvard Business Review post on