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How often should you launch a new service offering?

Does it matter how often you launch a new service offering? The answer is yes, it matters. Recent research from Georgia State University shows that the pace, rhythm, and scope of new market introductions have a big impact on the market value of pharma companies. What does that tell service firms?

Finding the perfect pace for launches

The research – studying 1952 pharmaceutical product launches of 73 firms over the period 1991 to 2015 – shows that the impact of the pace, rhythm, and scope of these launches on the firm’s market value is significant.

Estimating the average size of an S&P firm at about $35 billion, the impact of pace, rhythm and scope of product launches are in the order of billions of dollars in terms of firm value.

For example, pace and scope result in an increase of 1% in market valuation, for companies that are 10% better than the rest. Rhythm results in an increase of 10% in market value, for companies that are 10% better than the rest. The latter equates to more than a billion dollars difference in estimated value!

With the presence of high marketing intensity (a 10% increase from average marketing intensity), a firm can even obtain a $4% increase in firm value with an increased pace of 10% above the average.

However, when technological intensity is up 10% and the pace is just average, a firm stands to lose 7% of its market value.

In other words, when it comes to the pace, rhythm, and scope of new market launches there is a lot at stake.

Launching new offerings

What is perhaps most interesting, is that this research shows that besides what you introduce, it also matters how you introduce these new offerings in terms of pace, rhythm of the launches and scope of the offerings.

The effectiveness of the management of your innovation process, pipeline, and portfolio determines the pace, rhythm and scope of your new service launches.


Pace is determined by how efficient and effective your process is managed. How many solutions can you bring to practice in a given time period? How long does it take you – on average – to turn ideas into practical and implementable high-value solutions?


Rhythm is a functions of how well you manage your innovation pipeline. Are you planning the launches out well? Or do you have 2 launches this year and nothing to show for the next two years?

Expectations matter.

There is another benefit to adhering to a fixed rhythm. A regular launch schedule evens the workload of those involved in innovation activities over time. It avoids having quiet periods and overload in for instance your marketing department. After all, developing and launching a new offering takes a lot of effort!


How close to your core competences are the new offerings? Previous research on new service development in consultancies, showed that service firms cannot deviate too much from their core. This more recent research seems to indicate there is an optimum.

Your new offerings should not be too far from the core, but not be too similar either. Probably because service firms rely on their reputation to get new customers and reputation only carries you so far. The management of your portfolio of innovation projects defines the breadth and depth of the your portfolio and thereby its scope.

A software firm example

In the Harvard Business Review, Ellen Donahue-Dalton – the executive vice president and chief marketing and customer experience officer at Medecision, a  population health management software company – relates these findings to her experiences.

Medecision launched 10 new products over the past 18 months. That is two to three times more than the firm typically launches in such a period. The firm felt the consequences.

Their customers struggled to adopt to all these changes and started to value subsequent updates less and less. So, there was a diminishing return on the innovation efforts. In hindsight, it would have been better to spread these launches over a longer period.

Their marketing department struggled to keep up with the pace of the launches. They struggled to reach out to new clients. Instead of maximizing the impact and reach of each launch, they hurried from one launch to the next.

However, the solution is certainly not to bundle more value into a single launch. Bundling a lot of benefits into one new offering makes it difficult to prove the causal relationship between the use of the new service and its benefits. There are simply too many moving and interacting parts. Thus, bundling a lot of new features into one new offering is not the solution either. Clients will then also fail to grasp the benefits of each.

Most service companies err on the side of too few launches

The problem of Medecision may not be recognizable for many service organizations. Most service firms err on the side of not innovating enough and the pace of their innovation process is too slow.

In our experience, to launch one high-value new service offering each year, a firm needs about:

  • 10 ambitious plans that get vented and vetted
  • 5 in depth explorations that investigate whether the opportunity is worth the trouble
  • 2-3 investments in projects that concern the further development of promising concepts
  • 1 to 2 implementations of these new service offerings in practice, to test if it works

-> Resulting in 1 offering that makes a difference and impacts your clients’ and your organization’s bottom-line about 8 to 18 months later.

Lack of initiatives is not the issue

The problem is rarely that there are insufficient ideas. Most service organizations have too many ambitious plans, yet that result in too few offerings that make a difference. It takes time, energy, and resources to transform a plan into a new offering.

In these organizations the innovation pipelines are stuck and not enough results come out of the pipeline. Let alone that these launches occur at the right pace, a regular rhythm, and within the right scope.

One challenge is to explore opportunities in a time efficient and cost effective manner. Another challenge is to get these novel solutions tested and implemented in practice.

It pays off to manage your innovation pipeline

To introduce novel high-value solutions at the right pace, a regular rhythm, and of the right scope, you will have to unstuck and manage your innovation process, pipeline, and portfolio.

The research above shows that those efforts will pays off. With regular new offerings – say once a year or every other year – your clients will notice that you are always delivering state-of-the-art services. That will give your clients a reason to stay!

The same holds for your employees. The various departments involved with testing and delivering new service offerings will know what is expected of them – develop, implement, and deliver one new high value service offering each year. With the appropriate support, advancing like that is exciting!

Now, go out there and launch your new services at the right pace, rhythm, and scope!




P.S. In case you are not sure where or how to manage your innovation process, pipeline, and portfolio look at our programs.We gladly assist you in improving your innovation output.