One of the most exciting things that happens in businesses of all stripes is innovation — the next generation of a product, a new product launch or market entry; perhaps a new go-to-market strategy.
Innovation not only exciting, but often serves as a welcome relief from the day-to-day management of the current product or services portfolio. Since we often must face pressures like declining sales and market share, slowing sales cycles, shifting the focus to the next growth driver is quite refreshing.
The problem is, we don’t know what we don’t know. The hidden caveats and headwinds; the factors that may kill the deal if company leaders were to scrutinize closely.
This is not a case of “hiding” the downside; it’s more that the enthusiasm of the group charged with developing the new idea overwhelms the diligence that should be done.
To avoid casting all this “market-testing” in a negative light, these questions that arise around planned innovation are rarely black and white.
Rather than simply asking, ‘will the pig fly or not?’ the inquiry might focus on nuances such as, whether the core idea is based on solid market need and demand. Secondly, if the demand is there, is the proposed product or service (or extension) the best way to go about it, to capture new customers and share? This presages all the tertiary details about pricing strategy and go-to-market approach.
Often, in doing market assessment, what you learn is that you were indeed on the right track with gauging the overall opportunity, but customers want different product or service formulations than the ones you had in mind. Learning about these preferences for different variations is good news, providing it can be discovered at an early stage of planning.
No surprise, it all comes down to target market customers. It’s not that your organization never talks to customers. Quite possibly, your innovation is aimed at different customers than those you currently sell to. Moreover, those customer conversations you frequently have are usually focused on other pressing matters. And if you did ask some of those who are most loyal what they think about your idea, you will get some good, but likely skewed feedback.
Typically, those customers where the relationship is warm enough to ask the question to begin with, are highly likely to be loyal, raving fans. Their brand loyalty may be such that they will be very generous in assessing whether they would try and even favor your innovation. Their latitude for you brand extension is likely to be a very wide moat.
Channel partners or end users who are not yet raving fans might have a different idea about whether they are willing to trust you, vs. the incumbent providers in the new category with whom they may already be doing business with.
After delivering customer, competitor, and market research for 25 years, we have seen our share of myopia around these evaluations around innovations. We have found very few companies have the bandwidth, skills, discipline, and objectivity to assess these critical market adoption factors on their own.
Let us know how we can help.