How Innovators Leverage Market Research to Remove Risk When Concept Testing New Products and Services
By Chuck Bean, Partner and CMO
“Innovation opportunities do not come with the tempest, but with the rustling of the breeze.”
— Peter Drucker
The notion of innovation has practically become part of the standard vernacular in the business world these days. Ever since Steve Jobs both lived and said the words, “Innovation distinguishes between a leader and a follower” have thought leaders and their companies pursued innovation as a key driver of value. You’re either growing or dying, and all of that.
But there is both a true art and a proven science behind successful innovation. It’s typically not enough to merely “think big” and “swing for the fences.” Innovation pursued solely for the purpose of change can be wrought with risk.
On the contrary, measured, thoughtful and process-driven testing will inject greater predictability into the innovation endeavor at hand. What’s more, concept testing, as a function of quantitative and qualitative market research, can insulate the innovator from wasted resources and unnecessary capital expenditures.
“Know before you go.” It’s a simple mantra, and one that can be eminently rewarding to live by.
The Role of Concept Testing in Product Development
Concept testing is a pivotal stage in the product development process. After an initial idea or concept has been developed, brands must validate its potential in the market. This process involves assessing whether the concept is understood, appealing, and viable from a consumer perspective.
Typically, concept testing answers key questions such as:
- Target Audience: Who are the most likely buyers for this new concept?
- Comprehension: Do consumers understand the concept and its proposed benefits?
- Interest: Does the idea generate excitement or curiosity among the target market or customer persona?
- Willingness to Pay: Are consumers ready to pay for the product or service innovation, and at what price point?
- Messaging: Will the communication strategy align with the value consumers authentically see in the product or service?
- Competitive Landscape: How does the concept stand up to known (and unforeseen) competitors?
- Available Market: Is the view worth the climb? What is the revenue potential for the concept?
Pro Tip: Clarity of Communication is Critical
One of the biggest challenges in concept testing is ensuring that participants in a market research study fully understand the idea being considered. How a facilitator, or survey instrument, presents and communicates a concept to a typically non-expert audience significantly impacts the feedback one receives from study participants. Without a clear and compelling presentation/description, respondents may fail to grasp the product’s value, leading to unreliable insights.
There are several ways to rise to this challenge:
- Immersive Clinics: The best way to ensure maximum clarity when conducting a target research study is hosting in-person clinics, which enable participants to see, touch and interact with the concepts. This hands-on approach is especially effective and highly recommended for tangible, tactile products, such as cars, toolboxes, household appliances and devices, or even proposed packaging solutions. Seeing is believing; and when people can see and hold a product concept for themselves, they typically have a meaningfully greater understanding of the concept innovation being tested.
- Video Demonstrations: The next-best way to conduct clinics — when in-person is not possible or practical — is to conduct clinics over video or Web meeting. Visual aids, such as product demonstrations, can bring a concept to life by showing how it works in real-world scenarios. For instance, a recent research study for Michelin’s “Tweel” — a combination of tire and wheel without a typical metal hub — used video to demonstrate its application in wheelchairs, showcasing its ability to navigate curbs and rough terrain effortlessly. In situations like these, video demos are the next best thing to demonstrating a concept live and in person.
- Online Surveys and Interviews: Digital platforms allow brands to share images, animations or videos of their concepts and gather feedback efficiently. These methods are particularly useful for quantitative insights that can be gathered quickly, economically, and at scale. While they have applications in which they can prove quite useful, they typically do not deliver the richness of insight offered by immersive clinics and real-time video presentations. That said, sometimes they outperform those methodologies from a speed or cost standpoint.
- Concept Statements: Conducted in person or over video, a facilitator may choose to read descriptive statements about a product or service innovation concept aloud to study participants and ask for feedback to what is being described. While probably the least preferred method, descriptive statements can be useful for quick initial testing, provided both the statements presented and the participants’ responses are clear and concise.
It should be noted that, while often preferable, immersive clinics that offer hands-on use of a product do potentially carry with them some degree of risk for those brands who wish to test concepts prior to release secretly or anonymously. Information could be leaked — either intentionally or unintentionally — which competitors could use to their own advantage.
Along those same lines, on the other hand, testing concepts in a controlled, closed environment (and not online, publicly, for example) is among the best ways to get real-world feedback on a concept without revealing the details to the world of competitors and customers before the product is fully locked down, the intellectual property has been secured, and the go-to-market strategy has been thoughtfully planned and implemented.
The success of concept testing hinges on evaluating the appropriate metrics. A comprehensive scorecard can help brands measure the full range of critical factors, such as:
- Consumer Understanding: Do respondents grasp the concept?
- Purchase Intent: How likely are they to buy the product?
- Perceived Value: What features drive willingness to pay, and to what degree?
- Brand Fit: Does the product align with the brand’s identity and values?
- Competitive Preparedness: How will competitors react to the new product, and is the brand ready to counter their moves?
So What? Now What?
Importantly, concept testing doesn’t end with validation. There is too much at stake to simply go looking for validation of a concept, which can be alluring and tempting to find where one wishes to find it. In reality, validation is just the beginning; it’s what you do with that concept validation intelligence that will make or break the concept development and ultimate rollout.
The insights gathered through the course of a concept testing market research study should guide the brand’s next steps going forward, such as product refinement, messaging development, and go-to-market strategies. We recommend that the insights returned be frequently called upon and consulted throughout the entire lifespan of the product/service rollout.
Brands must also evaluate how their product stacks up against competitors and ensure their sales teams are equipped to highlight its unique value, as specifically stated by the target market being studied.
In fact, concept testing is part of a broader innovation framework, which we will continue to explore as we continue our series on innovation, including:
- Adjacency Analysis: Identifying unmet needs and market opportunities adjacent to those in which you already win.
- Product Portfolio Assessment: Ensuring brands are thoughtfully achieving the right balance of “good, better, best” solutions or products.
- Core Competency Research: Leveraging the brand’s proven strengths to explore new adjacencies (market, industry, or geography, e.g.) as a means of innovation.
Before You Go
Market research generally — but particularly concept testing — empowers brands to make informed decisions, reduce risk, and maximize their product’s chances of success through innovation. By focusing on clear communication during studies, identifying and measuring comprehensive metrics, and applying genuinely expressed market motivations, businesses can confidently move from concept to commercialization in a way that will allow them to remain the innovators and leaders that Jobs referred to.
With these strategies, brands not only validate their best ideas, but also ensure they are well-positioned to succeed in the marketplace — more quickly and more impactfully. The more you know, the higher you’ll go.
