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Product development is potentially expensive and risky. You spend a significant amount of money to bring a product to market and only then find out if your customers want to buy it. Is there a way to reduce the risk? Start-up manufacturers cannot afford the risk and evolved to use crowd funding to help them minimise the risk by getting customer buy-in before committing to invest in the product. Since 2009 Kickstarter has raised nearly $900m in product funding. Kickstarter allows potential purchasers to evaluate new products and pre-commit to buy before the product has gone into manufacturing. If there are not enough customers to cover the start up costs the project doesnt proceed and the customers get their money back. We are not suggesting that established brands launch their products! But there is a lot to be learnt from the process. If you have a significant base of past purchasers who have bought your existing products then why not increase their loyalty and make them feel special by inviting them to evaluate future products and inviting them to reserve products in advance at advantageous prices? For example imagine that you make a ladies leather bag in brown that has sold quite well and you are interested in bringing it our next season in a range of colours? By inviting past buyers to reserve bags in the new colours you learn which colours will succeed, detect the colours that are better dropped and secure upfront committed revenue to contribute to development costs. You could have invited customer to vote on new colours, but asking for a commitment ensures you get accurate reliable feedback as well as pre-selling product. ARTICLE SOURCE http://bit.ly/OiZpIq : This factual content has not been modified from the source. This content is syndicated news that can be used for your research, and we hope that it can help your productivity. This content is strictly for educational purposes and is not made for any kind of commercial purposes of this blog. |
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