Product Development Tactics Stephanie JohnsChin New Product Development
- Slides: 28
Product Development Tactics Stephanie Johns-Chin New Product Development and Marketing Group Membership Association Division New York Life Insurance Company The Company You Keep®
Product Development Tactics Ø The Constant Flow of Ideas Ø Effective Use of People Ø Management of Process
The Constant Flow of Ideas Ø Connections Ø The Pipeline Ø Communication
Connections are made from ideas…. . like ripples in a pond
Connections How Did? Lead To Popularity of underwear in the 12 th century Invention of the printing press in 14 th century James Burke, Connections, Simon and Schuster, 1995
Connections
The Constant Flow of Ideas The Pipeline üSystems/Technology üDemographics üWeb üMarketing Channels üEconomy üCompetitors üFinancial Services Industry üInsurance Industry üRegulatory üYour products
The Pipeline ØEconomy ØSystems/Technology • Data modeling • Global • STP/e-signature • Credit crunch and the Mortgage Industry • Communication – Cell/Blackberry/Laptop/Wireless ØWeb • Information/Advice/Price • Retirement incomes are largely dependent on stock market • Buy – Retail • Internet Communities Ø Financial Services Industry ØRegulatory • Branch Banking/Credit Card Companies • Healthcare • Cross-Sell • Gramm-Leach-Bliley (GLB) Act – privacy • Premium billing vehicles • HIPAA • Competing products • Pension Protection Act • Convergence - Banks buying insurance Co’s • Do-Not-Mail/Call/email • Actuarial Guideline CCC
The Pipeline ØDemographics • Multi • Generational • Cultural • Multi-lingual • Population Distribution –From 1990 -2000 ü Growth of 32. 7 million people ØMarketing Channels ü Biggest increases in South and West ü 54% of population live in 10 most populated states • Email • Social Networks • Banner Ads • Twitter • SEO • Blogs • IM • Facebook • DRTV • Linked In • Direct Mail • Etc… • Telemarketing • Second Life
The Pipeline Ø Your Products Ø Competitors • Products • Take a regular look • Channels • Go back to basics • Market Share • What about repositioning? • News • Client Service • Best Practices • Ratings ØInsurance Industry • Other Sectors (i. e. , Life/Health P&C) • Other Lines (i. e. , Group Individual) • Research organizations üLIMRA ü EBRI ü NAIC ü iii • Industry Publications üNational Underwriter üBank Insurance & Securities Marketing üEmployee Benefit Advisor • Think Tanks üCorporate Executive Board – IAB • Trade Association üAmerican Council of Life Insurers üAmerican Insurance Association
The Constant Flow of Ideas Ø Communication • Run a “News Service” • Keep an Open Door …and Ear • Share Ideas in Incubation Stage
Effective Use of People Ø Leadership Ø Core Team Ø Technical Experts Ø Managing the Team Ø Environment
Leadership Area with Primary Accountability for Product Development * LIMRA 2007 Individual Life Insurance Product Development Process Research
Leadership Dedicated Resource Ø Charged with product, market, channel development and competitive analysis Ø Marketing background – diverse market experience Ø Alien in their midst Ø Share information, experiences, insights, ideas and instigate discussion Ø Manages the process
Core Team Ø Keep the team on the smaller side - larger groups generate fewer ideas Legal/Compliance Actuarial Ø Diverse teams way out perform homogeneous teams over the long term Ø Diversity allows the team to step into the intersection of disciplines, cultures, and domains in which one can specialize through education, work, hobbies or other life experiences. Marketing Account Management Contracts/Filing Medical Underwriting
Technical Experts Sales Other Business Units Claims Legal/Complian ce Actuarial Marketing Financial Reporting Our Business Unit Account Management Contracts/Filing Audit Medical Underwriting Systems
Managing The Team Herding Cats Financial Underwriting Medical Underwriting Service and Administration Claims 17 Actuarial
Managing the Team How Key Individuals Are Held Accountable for Product Development Results LIMRA 2007 Individual Life Insurance Product Development Process Research
Environment Survey Says…. Ø Four out of five companies have dedicated product development teams* Ø For half of these, team members work exclusively on product development* Full Time Focus Part Time Focus • Faster timeline • Focused • Stale • Exposure to day-to-day • Flexibility in Team composition • Extends timeline *LIMRA 2007 Life Insurance Product Development Research
Environment Stay away from ü Avoid passing judgment on each other’s ideas ü Be constructive and look for ways to overcome obstacles Land of NO!
Environment Ø Respect Diversity Ø Ongoing Feedback Ø Honest Open Communication Ø Empowerment Ø Access to key executives Ø Time for people to participate Ø Dedicated Resources - Must have a point person Ø Allocation of Funds
Process Ø Traditional Approach Ø Recent Trends Ø I Would Add…. Ø Bumps in the road Ø Keys to Success
Traditional Approach The Tried and True Method Ø Developed by technical areas (underwriting, actuarial, claims) Ø No market research conducted Ø Typically - One size fits all Ø Long cycle time to develop Ø Build it and they will come mentality Ø Marketing Department not involved until product is completed Ø Sold by an Agent (Insurance is not bought, it’s sold)
Recent Trends Companies now have: Ø Formalized development process 87% of companies implemented new approaches for the design of new products Ø Enhanced testing process Ø More tightly controlled sign-off procedures Ø Improved communication Ø Outsourced IT function Ø Quality assurance testing done by business analysts Ø Moved tasks from “Day 1” to “Day 2” LIMRA 2007 Life Insurance Product Development Research
I Would Add…. . Ø Establish Ø Timeline/Schedule which must be reasonable and defined with some built in flexibility Ø Build in periodic reviews/vetting process of ideas Ø Accountability for delivery of assignments Ø Ensure Measurement Ø Response Rate Ø Client Adoption It’s not just Fire and Forget! Ø Profitability Ø Be Prepared to Re-evaluate and Respond Ø Marketing is a great place for the process to reside
Bumps in the Road Most Common Reasons for Schedule Changes 91% Product Design/Pricing IT 69% Organizational priorities Corporate requirements Legal issues Admin req. 66% 22% 19% 16% LIMRA 2007 Life Insurance Product Development Research
Keys to Success Strongest correlation of success is the number of ideas you explore and build upon Companies that cut R&D costs can actually accelerate innovation, boost growth and increase profit*. ü Apple is considered an innovative company ü Spends only 3% of its yearly revenue on R&D. Foster an open environment allows for true brainstorming ü Produce as many ideas as possible ü Produce ideas as wild as possible ü Build upon each other’s ideas Make it fun *Michael Davies, MIT Sloan School of Management
Final Thought…. . Don’t get caught up in your underwear!
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