The zombie (brand) survival guide

What’s the big idea?

Companies are damaging their businesses by launching products which just eat into their profits: whether these are ‘zombie’ products, which fail to provide long-term growth and act as a dead weight on the company, or ‘cannibal’ products which simply transfer customers from other products in the portfolio, and in many cases actually cause brand decline.

We studied 3,500 consumer goods launches in the UK, including savoury snacks, laundry, soft drinks and skin care, and found that 60% fall into this category. Conversely, we found that only 15% of products launched are what we have called ‘expansion innovations’ – new products that attract sales which add to a company’s existing revenues.

What does this mean for my business?

The goal of most new product development should be to identify an expansion innovation – a product that can attract new customers or increase the share of wallet among current users, rather than eating into revenue from existing products. This is true growth and something businesses in all sectors need to try and identify.

OK. So what’s the plan of action?

Companies need to identify products that will draw in brand-new customers or lead to greater frequency of use by the customers they already have. And crucially, they need to identify them early in the process, before R&D funds are assigned.

This puts a sharp focus on the decisions made from opportunity identification and early concept testing. We know that in traditional screening processes, consumers usually respond well to products they are already familiar with, such as a new pack format from their favourite detergent. The problem with this approach is that the natural targets for these products are usually existing buyers of the parent brand and their purchases of the new product will only cannibalise existing sales.

This tired old approach to screening is also responsible for thousands of truly innovative new product ideas being consigned to the scrapheap – because mainstream consumers don’t ‘get’ the new idea.

To identify expansion innovations, companies need to look beyond how many individual units it will sell, and instead ask where those sales will come from? This requires a complete overhaul of the current process used to prioritise growth platforms and screen concepts. The industry needs to adopt an individual-based model, which looks in detail at the consumer’s current buying patterns and how the new product will affect them.

We also need to give extra weight to those who will buy the new product more frequently. This approach naturally gives extra weight to innovative, less mainstream ideas, which are likely to draw new customers to the brand – and are therefore unlikely to become zombies or cannibals.

Now we know all this, what questions should we be asking next?

Companies need to look at their innovation pipeline and ask whether their planned launches are genuinely innovative and have the capacity to unlock growth in the form of new customers or the ability to get more money from current customers – or whether in reality they will simply cannibalise their existing portfolio.

At the same time, are they inadvertently casting the next iPad or Red Bull onto the scrapheap? If the answer could be yes, it’s time to shake up those processes and look at a fresh approach to finding growth.

Steve Landis is global head of innovation and product development at TNS