Are you in one of the following situations?

  • Wrestling with a struggling product line.
  • Thinking about starting a new business.
  • Planning to launch a new product or service.

On the road to success in these areas, you will notice well-beaten trails branching off to the side. If you take one of these side trails, you will find yourself lost in the woods.

This article reveals five mistakes we sometimes make when getting a new product or business off the ground. It equips you to avoid these mistakes by following effective strategies rather than simply operating by what seems right or easy or comfortable.

Average Shoe - Mistake #4

Mistake #1: Investing in capacity before investing in customer acquisition

All of us have comfort zones. At Rosewood Marketing, we are comfortable with things like words and images. Other business owners and managers are most comfortable with the lingo and operations of their particular shop and industry. Most of us, no matter our industry, tend to avoid things we don’t understand. Unfamiliar concepts intimidate us. Since things like customer research or sales and marketing are unfamiliar concepts to many business owners, they tend to focus on other things instead—things like facilities and equipment.

Simply put, this mistake is investing in your buildings or equipment when you should be investing in a system that will deliver a steady stream of customers. After all, what good is inventory on the shelf or an efficient production line if you have no orders?

Many people in business know how to make a product or deliver a service. They may even be passionate about it. But do they know how to create a system that consistently collects orders? Uncertainty about how to create an order-generating system too often means that sales are slow or sporadic.

The following question reveals a fundamental difference in the way business owners look at marketing: “Do I see the cost of sales and marketing systems as an expense or an investment?”

While it’s true that the bank won’t loan money to a small business against a box of brochures or a logo, your marketing efforts really are an asset, just like a machine in your shop. Marketing expenses are an investment in the health of your company and should provide a good return on investment.

As you know, just pouring money into sales and marketing doesn’t guarantee that loyal customers will suddenly show up. You can haphazardly throw cash into a marketing money pit, or you can craft a thoughtful strategy based on research and best practices. Guess which has a greater chance of filling your production capacity?

Mistake #2: Adopting a poor pricing strategy

Walmart’s slogan for nineteen years was “Always Low Prices.” (Since 2007, the slogan has been “Save Money. Live Better.”) You might think that you should also adopt a low-price strategy since Walmart has proven to be such a successful company. And who doesn’t like to save money?

Pricing is more complex than this simplistic approach. What if your potential customers are looking for the best, not the cheapest? What if low prices communicate low quality and turn customers away? Don’t assume that low prices will automatically result in higher sales or sufficient profits.

Misunderstanding how to price products has been the downfall of many businesses. If you are only using a cost-plus pricing strategy, take time to learn other pricing models like value-added pricing. Ask questions to determine how much your prospective customers would be willing to pay for the value you are providing to them.

In his book The Personal MBA, Josh Kauffman highlights the value of knowing several pricing methods. He writes, “Use the other methods as a baseline, but focus on discovering how much your offer is worth to the party you hope to sell it to, then set your price appropriately.”

You’ll want to make sure to do the work of calculating the true cost of your product. This includes research and development, overhead, marketing, manufacturing, and delivery.

Do your customers understand the quality and value of your product? Complement your pricing strategy with a concerted effort to communicate your product’s true value to the customer so they will gladly pull out their wallets to exchange money for this value.

Mistake #3: Making false assumptions

Most of us believe a great product will mostly sell itself as long as we tell people that it exists. We believe that they will understand the product’s advantages and immediately purchase it. Well . . . maybe you have discovered that this is a false assumption.

Many of our false assumptions come from thinking that the customer thinks, acts, and believes like we do. For example, some business owners are thrifty people who like to save money and get good deals. We assume that our customers will not be willing to pay more for our product than we would be willing to pay. This is often not true.

No customers are exactly like you. Or me. Not even your brother shops exactly like you. He may share some of your tastes and values but not all of them. Likewise with our customers.

Sometimes it feels that customers live in a different universe because they look at things so differently. Some common areas of difference between you and your customers include the following:

  • The value of time
  • The value of quality
  • The value of beauty
  • The value of security
  • Level of education
  • World view
  • Culture and subculture

We waste a lot of time when we do not understand the customer.

  • We invest in creating features customers don’t value.
  • We miss opportunities to add value because we don’t know what customers want.
  • We miscommunicate more frequently.
  • We are unable to design and deliver a great experience.

No, we cannot know everything. Yes, every business needs to make assumptions or educated guesses. But to avoid being hurt by false assumptions, attempt to test whether your key assumptions are true. Have conversations with actual customers. Learn how they think and what they are looking for. Research the market and the competition. Try a product trial or a test case.

Mistake #4: Serving a market that is too broad

Imagine that we are starting a shoe company. To keep things simple, we decide to make a single shoe to sell to anyone. On average it would fit people the world over.

How would we create this amazing shoe? We would start with polling and data to learn the average shoe size, the most popular color, the favorite style, and preferred material of shoes being sold. We would then take the three most popular styles and blend them together along with the three most-favored materials in one average size for our world-dominating shoe.

This shoe designed for broad appeal would surely have high sales fast! (What! Why are you chuckling?) Of course not! We wouldn’t even wear this shoe ourselves. And yet, in smaller ways, we attempt to design products with broad appeal and end up satisfying very few.

“Very well then,” you might say, “let’s make our shoe completely customizable. Any color, any size, any material, any style, any price. Surely everyone will be happy to know they can get exactly what they want.”

But this approach is likely to also be unsuccessful. Can you tell why? The options would overwhelm customers. They would feel confused and uncertain about whether they were making a good choice. They would throw up their hands and walk away because it would take too much mental energy to purchase a shoe.

In Purple Cow, Seth Godin writes, “Find the market niche first, then create the remarkable product—not the other way around.” Instead of designing something for everyone, focus on a select group of customers and create a solution that fits them perfectly.

Mistake #5: Copying your neighbor

Solomon wrote that there is nothing new under the sun. And when it comes to launching something new in business, you might feel that there is nothing new to do or create. This kind of thinking may lead you to copy what you have seen someone else in your community doing.

This creates a problem. It’s not fair to the other person to mimic their product. If you are considering this approach, ask yourself the Golden Rule question: “How would I feel if someone else did to me what I am planning to do to them?”

Copying someone else is easy, which makes it appealing. Perhaps you are thinking to make modifications to distinguish your offering from your neighbors, but this is not enough.

So what should you do instead? Here are some ideas:

  • Explore another niche. What types of customers are underserved in your market?
  • Perhaps you could tackle the same problem from a different angle by creating a solution that doesn’t yet exist, at least in your industry.
  • Look for a new problem to solve, which means there is opportunity for a new product. Examine frustrations in your own life that could be solved with a product or service.
  • Consider moving to another geographic area to start your business.


Perhaps you feel that marketing isn’t your thing. That is okay. Everyone has their area of interest and expertise, and you don’t need to become a marketing guru to be successful. Having a basic understanding of these pitfalls and how to avoid them gives you a solid foundation for growing your business through new or improved products and services. Evaluate your plans, products, and prices so you can avoid those side trails and stay on the road to success.

About the Author: Roy Herr is the senior marketing consultant at Rosewood Marketing. The Rosewood team guides business owners through marketing challenges into sustainable growth. Contact Roy at