Community Forum – How are new product sales calculated?
Companies often use new product sales (sometimes referred to as new product vitality) as a measure of R&D effectiveness. This metric is often reported as the ratio of new product sales (sales during the initial x years of sales) to total sales of the company or business unit. In different markets and industries there are different product life cycles and different times over which a product is considered “new”. The time frame a product is considered ‘new’ varies (the ‘x’ in the prior equation) to reflect this. This survey is designed to understand how new product sales ratios are calculated and used.
1. Do you measure or report a new product sales (vitality) index or other metrics?
Yes – all 22 responses
- 5-10 years depending on the anticipated useful value adding life of the technology advancement
- Depends on product
- Report all sales by product age
If no, how do they differ?
- We have different products or deliverable areas so the metrics may be business line amended.
- Each business unit uses its own criteria.