Innovation in product design is essential to growth; but it can feel risky and expensive for small and mid-sized businesses (SMBs). According to research from CB Insights, the number one reason that new companies fail is that there’s no market need for their product or service. Since just 60% of new product ideas succeed across industries, it’s important to make sure that there’s a demand for your product – before investing in marketing, design, or even manufacturing. New digital tools – including online concept testing platforms – are helping remove the risk from the product development process and making it easier to explore, experiment and innovate.
Here’s what SMB leaders need to know about the latest developments in digital concept testing.
Concept Testing and the Product Design Cycle
For every seven product ideas, four enter the development phase, and just one succeeds. Concept testing is one tool that can help increase the odds of success. This approach to market research helps business leaders make smarter decisions about their product portfolios by gathering market feedback early on in the development process. A well-designed concept test can help you distinguish between a product or service idea that’s destined to fail and one with a high “intent to purchase” that customers will spend money on.
Concept testing used to be the province of big business. They typically involved complex, expensive focus groups where customers met with brands in person and gave feedback on physical prototypes. However, new digital concept-testing tools have recently become available that let SMBs quickly and affordably test new product or service ideas online before investing in manufacturing and marketing through online surveys.
Here’s how it works:
- During digital concept tests, you show consumers a mockup and description of a product idea online.
- Consumers – often in the form of an online survey- share detailed insights on the product idea, and provide feedback on positioning and price,
- Consumers confirm that a market need exists and, ultimately, tell you whether or not they’ll buy it.
Creating a Digital Concept Test
Creating a digital concept test is straightforward and requires just a few components. When planning your concept test, you’ll need:
- An image that represents the product; this could be as simple as a product sketch or as complex as a finalized mockup
- A description of the product that explains what it is, what it does and how (if at all) it differs from what’s already on the market
- Basic product information like size or price
- A demographic breakdown of who you’re trying to reach, such as busy moms, retirees, college students – or just a cross-section of the general public – in order to determine your sampling strategy for who you survey.
Based on the feedback from digital concept tests, marketers and business leaders gain data and actionable insights on the following:
- Is there a market need for this product/service
- What the competitive landscape looks like and how introducing a new product/service could affect market share
- Pricing and positioning feedback
- Insights on features, benefits, packaging and other specifics
- Specific details on what messaging and language resonates with consumers
- Would consumers spend money on this product/service
How to Launch Your Own Digital Concept Test
Companies often have market research programs in place. However, for SMBs especially, that market research may not occur at the concept phase for product development. Incorporating digital concept testing is easy. There are several steps companies can take that supports a system for innovation:
1. Establish an internal process for collecting ideas: The first step in ongoing concept testing is gathering all the new product ideas and suggestions that come in. Often, suggestions come from customers or from your staff. Other sources include identifying problems in the market and looking for solutions, being aware of competitors’ product activities, and keeping lines of communication open throughout the company. Create a process for internally vetting those ideas – and then bring the most promising ones to the table for online concept testing.
2. Identify an online concept testing partner: There are numerous companies that offer digital concept testing. Choose a partner that meets your needs. It’s important to consider different platforms along the following lines:
- Do they have an industry specialty that’s relevant to your company? For example, does the company specialize in testing product ideas with mothers or with B2B executives?
- Is their platform optimized for digital concept testing in today’s market? For example, is the concept tests mobile-friendly?
- Is the process Done-for-You or DYI? Either approach can work, but has implication on reliability and costs.
- What does the analytics platform look like? Will you have access to raw data in the formats that you want? Does the company offer analytical services to help you quickly and efficiently understand what the data means for your product development plans?
3. Plan a system for incorporating feedback: As with all market research, concept testing data isn’t helpful if it merely sits on a shelf. Instead, establish a plan for analysis and sharing that information within the company. Schedule a meeting with key stakeholders to discuss the findings and determine how they influence your product development, as well as supporting functions like designing packaging or developing marketing messages.
Companies that embrace digital concept testing are on the way to making well-informed, data-driven decisions about where to invest limited product development resources. Product development that’s based on real market intelligence helps SMBs streamline their market offerings, stay in touch with what the market wants, and invest in developing those products most likely to generate a high ROI.
What To Do Next
To learn more about digital concept testing, contact a company that offers those services in their market research suite. A partial list of companies that provide online concept testing and product testing include: Instantly, Qualtrics, Seedling.IO and SurveyMonkey.