Measuring Product Success or Failure

Question: "How can we measure the success or failure of a product?"

Answer: The most common notion among many companies for a product to be designated as a "Commercial Failure" means that the company acknowledges two years after launch that there is no chance to recoup the entire investment made so far in the product (including all the development costs). Product termination usually follows and in this situation the company had clearly lost money on the product.

In terms of deciding if a product was a success or failure, the market usually categorizes Product Success Indexes into four groups:

  1. Financial – revenue, profitability …
  2. Marketing – sales velocity, market share …
  3. Product Level – on time-quality-budget …
  4. Customers – satisfaction, awareness, image …

All product success indexes are subjective and there are no objective criteria to measure the magnitude of a product's success or failure.