Sooner or later, you're going to blow it. Perhaps you'll push a new product that no one wants (e.g., Amazon's Fire phone -Mobile Marketing Magazine has the scoop). Or maybe your service enhancements will cause more confusion than clarity. Whether it's a minor disappointment or a full-blown fiasco, a flop is pretty much a foregone conclusion for anyone brave enough to run their own business.
The problem isn't that mistakes happen--it's mishandling them when they do. But if you follow these three steps, you can prevent a flop from turning into a major failure.
1. Test, Retest, and Test Again
I mentioned above that mistakes are unavoidable. However, I'm also in risk management, so I know that even unavoidable trouble can be minimized. And when it comes to a product rollout, careful beta testing is often the best way to manage the risk of a total flop.
Take, for example, the debacle over Apple Maps. Released in 2012, the app quickly became the butt of many late-night comedians' jokes for its tendency to mislabel famous landmarks and direct users toward airport runways rather than nearby roads. Granted, a mapping application is a monstrous undertaking, but proper testing should have revealed that Madison Square Garden had been labeled a park.
Don't shed a tear for Apple--it's doing just fine. According to AP News, Apple Maps was able to catch up to its main competitor in just three years.
The lesson here? Test your product thoroughly and give your team time to:
- Develop success criteria.
- Test the concept.
- Evaluate the potential market.
- Perform in-house testing and small-group testing.
- Course correct.
Then you may be ready to launch the beta version.
2. Have a Rainy Day Fund
When a small error in judgement becomes a major mistake, your bank account often bears the brunt of it. A good example of that: the Hewlett-Packard TouchPad. Many people saw it as a potential Apple iPad competitor, in part because HP touted it as such.
However, as CNN Money asserts, the TouchPad never caught on with the public and ended up costing the company millions. Worse, HP is still struggling to recover from this particular failure.
No one expects you to have millions in cash reserves, and you probably don't have investors looking to drop a bundle on your company. But you can still evaluate your revenue streams and expenditures for opportunities to increase your savings. Once saved, be sure to earmark a portion of those funds for worst-case scenarios.
3. Invest in a Safety Net
Put your hand up if you received a Fitbit Force over the holidays. Now keep it up if your hand is really itchy.
Actually, this year you'd be okay. But a few years ago, the band may have been part of this US Consumer Product Safety Commission recall. The report states that nearly 10,000 people experienced rashes and blisters from the Fitbit Force bands.
Did Fitbit lose customers because of the recall? Probably a few. But the real damage a company faces because of a faulty product often depends on whether it has Product Liability Insurance in place.
Product Liability is an important insurance policy for any business that sells goods to consumers. After all, when you put your product in the hands of a consumer, you're responsible for the damage it causes. Product Liability coverage--usually part of a General Liability Insurance policy--can help foot the legal fees when you're sued over the injuries your product inflicts.
You can't control your market's response to your wares, and you certainly can't control the future. But if you prepare your business to weather a flop, you can get back on track quicker.