Step 9: A New Service

A Successful Launch

The introduction of a new service is closely tied to the profitability of the business, but at the same time it is also closely associated to financial risks.

That the financial health of a business is closely related to its success in launching new services and products was demonstrated through a research recently carried out by the Journal of Innovation Management which concluded:

"Companies that lead their industries in profitability and sales growth get 49% of their revenues from services and products developed in the last five years.

The least successful ones get only 11% of sales from new services and products.

However, the attainment of this sales growth and profitability is not without risks. In North America, only 25% of the new services and products introduced in the market succeed in reaching their objectives. This state of affairs is rather sobering when you take into account the fact that the financial resources invested in the launching of new services are most often very high , when compared to the overall resources of the firm.

The NewServ diagnostic tool, which should help you increase the probability of success of your new service, is based on research that was originally done in the late 1980s by Bob Cooper, a reknowned authority on new products and services and now a professor at McMaster's University in Hamilton, Ontario. His goal was to find all the factors that have an influence on the success of new services and products, and also to find the relative weights of these factors.

In doing so Mr. Cooper and the other researchers who followed in his footsteps, produced a questionnaire which includes all the important factors relating to the success of new services. It is to a version of this questionnaire that you will be responding to in a few moments.

Once you have answered the questionnaire, you will receive feedback which will allow you to focus on the activities that will have the most impact on success.