A product launch is no easy undertaking, and the stakes are even higher during the holidays.
A holiday launch needs to be strategic to stand out. This requires a healthy budget along with a detailed plan.
That said, a holiday product launch can pay off in the form of a solid product ranking, increased sales, and keyword insights. This surge in customer awareness can continue to reap rewards even after Cyber Monday and holiday shopping comes to a close.
From getting initial product financing to supercharging your advertising strategy with Amazon and Walmart, there are many factors to consider. David Koifman, Head of Growth at Kickfurther, and Teikametrics’ Director of Insights Andrew Waber have tips to take you from start to finish.
Boost your launch with increased capital
Before you launch a new product online for customers, you have to launch the physical product.
David Koifman works at Kickfurther, an innovative modern platform for raising capital.
He said that product launches can almost always benefit from additional capital. Access to capital upfront can grant you wiggle room to explore new territory. The extra capital can be used for production, research and development, and more.
“You’re producing something that you haven’t produced in the past. So you don’t have the cash flows from the sales of that product to fund its production,” David said.
“I hear from a lot of business owners that they actually have a new product that they want to launch, and they just haven’t launched it because they haven’t had the capital to do so. While they’re still experiencing great success selling their bread and butter product line, they could potentially be doubling that or significantly improving it by launching a new product.”
Many companies are hesitant to “pay” for more capital. But just think about the fact that you can easily remain net positive while also empowering your business to scale and fulfill big orders.
While you may not make the same margin on every product, it can be worth it to pay a bit up front in order to sell more in total and guarantee you won’t run out of stock.
If you’re chasing partnerships with a big wholesaler like Target, having extra capital is even more valuable.
“People associate a cost to fund their business as a negative. I think it’s a positive. It’s a symptom of growth. It’s an opportunity to sell more,” David said.
“You finally land that meeting you’ve been after with Target or CVS and they put in a test order. And you’re like, yeah, no problem. I can pay for this production. But what’s the next step from that test order, right? It’s going to be like 20x that so that they can put it in 100 stores.”
The key is to be prepared for growth before that growth actually materializes.
Seek capital from diverse sources
If you decide to pursue capital to fund your product launch, don’t assume venture capital is the only route. In fact, it may be the last option you want to consider.
David said that venture capital may be popular, but it can be expensive and dilute your ownership. Today there are many options for funding, from traditional loans to NCAs.
“The sexy thing that everybody’s after is venture capital. I want to get an equity investor who’s going to buy a piece of my company. And they’re a big name, and I’m excited, and I’m going to talk about it at cocktail parties. But here’s the thing: that’s really expensive money, especially if you believe the valuation of your company is going to go up,” David said.
Perhaps the best option is a good old-fashioned line of credit or a loan from a bank, as they are often by far the most affordable form of capital.
The issue is that if you’re an early-stage business, you may not pass the traditional underwriting process required by the banks.
The alternative is more modern forms of funding, such as NCAs or revenue finance providers.
“I’m sure you’ve all heard of Shopify Capital and Amazon Capital. Those are more modern, like Kickfurther, in identifying risk and saying, yeah, you’ve only been around for a year. But we see some really good results in your sales and we’re willing to give you some money,” David said.
The bottom line is that if you have a great product, there’s no reason to be held back by limited capital.
Stock product well in advance
If nothing else, when you have your eye on a holiday product launch you need to have enough capital to stock up on your product.
What you absolutely do not want are out-of-stock notices or lengthy shipping times that will cause your customers to bypass your product.
In the world of two-day Amazon shipping, a delivery timeline longer than that is cause for concern.
Preparing for this may require more advanced planning than in years past, as you navigate both competitors and COVID delivery timelines.
“Brands who are growing and maybe working with a new manufacturer that is typically dealing with bigger customers, you’re not going to be their top priority. So you want to make sure to give yourself a buffer. So if they have a bigger deal ahead of you and that bigger deal gets prioritized, your delay doesn’t prevent you from doing what you want to do when you want to do it,” said David.
One way to sidestep this problem? Buy in bulk.
Often you can receive a hefty discount from the manufacturer for large orders, and improve your margins while you’re at it.
“Understand what the quantity discounts are. If you’re buying twice a year versus four times a year, how much can you improve your margins and reduce your stress?” David said.
“It’s not just about paying for inventory. Inventory’s such a high cost, but it’s about freeing up that capital for everything else you need to do.”
“Everything else” includes things like targeting the right keywords, making sure you have fulfillment solutions, and making sure your packaging and listings are attractive.
Target specific keywords
Once you’re ready to share your product with the world, it’s time to advertise.
Teikametrics’ Director of Insights Andrew Waber said that a broad advertising strategy is tempting, but it’s better to go narrow and deep. This will give you the highest chance of ranking above established competitors.
“Top sellers on those really popular terms are going to be really hard to unseat. Or missteps like out of stocks can really impact your organic rank. So it’s those folks that have been there a while, it’s really hard to get past them. But there’s a way to do that, which is advertising,” Andrew said.
Your best bet is to use automatic campaigns to figure out what keywords are seeing good volume. Then, target those specific keywords with your dollars.
The goal is to dominate that small basket of specific keywords. Once that automatic campaign starts to result in a high conversion volume, you know you’re onto something.
Spreading yourself too thin with a broad strategy will put you at a disadvantage. A focused strategy will almost surely pay off.
Shift your bidding strategy as conversions increase
Keep in mind that the advertising environment is not static.
Things like keywords can change dramatically between August and December. You need to be confident that your strategy is timely and will resonate with customers.
“It’s a more volatile marketplace during the holiday season. All those terms that you see, or that may be very popular in one month, if you go to the next month some of those don’t stay the same. You tend to see bigger drop-offs throughout the year,” Andrew said.
The pandemic has further thrown a curveball into the way consumers are shopping from month to month.
“It really behooves you to be just much more on top of what’s resonating now? What am I seeing today? What have I seen in the last week, last month that leads me to believe this is going to be a popular term, can I invest in it?”
If you’re not sure where to begin, Andrew said that your best bet for finding new customers is to look for category terms versus branded terms.
“Really focus on these category terms, because that’s where you’re going to find new customers that don’t know about your product,” Andrew said.
Once you start seeing conversions on those terms, the next critical step is to switch your campaigns from automatic to manual.
As conversion volume goes up, you want to further capitalize on those terms. If an automatic campaign is performing well, it’s tempting to think you can leave it alone. But the data shows that if you move the same term from an automatic to a manual campaign, conversion rates go up across the board.
Product launches call for experimentation
Product launches are about learning. During the holidays, the regular advertising benchmarks and rules may not apply.
For example, if you’re a veteran Amazon seller you might have a certain threshold you typically like to hit before you take a keyword from automatic to manual.
But during the holidays, when you’re in a product launch, you might want to lower that threshold a little bit so you can try to capitalize.
“You’re seeing where the positive effect is from the consumer base. Where are they coming in? Where are they converting? And just be a little bit more experimental there,” Andrew said.
When it comes to budget, we recommend uncapping budgets if you’re seeing a profitable sale, or a sale within your profitability range.
“You don’t want to necessarily be hamstrung especially during let’s say Black Friday or Cyber Monday. ‘Wow I’m having an awesome sales day via my ads, but I’ve run out of budget halfway through. And now I have to pull back, I have to lower my bids.’ You’re leaving that open for a competitor to come in,” said Andrew.
When looking for holiday payoffs, be patient. Results from a holiday launch won’t happen overnight, but they will become clear over time.
Success requires more than investing in just two short weeks of ads.
“It’s a surge. It gets the flywheel moving in your direction. You’re seeing the positive feedback loop. But it’s not something where I’m just going to turn it on for let’s say this two-week period, and then I can turn it off. For that organic ranking to really change, it may take a while,” said Andrew.
Hitting the gas during the holidays is a smart move. Just keep your eyes on the road and follow the signs that customers are sending you.