Introducing new and successful products is crucial in order to grow your organization and outperform competitors. The only problem is the risk involved. Creating a solution without being 100% confident that it’s the right product, for the right time, and for the right customer. About 30,000 products are launched annually, yet 80% of them fail.
Minimizing the risk involved in new product development requires a process of thoughtful research, design thinking, engineering, prototyping, testing and validation.
Following a smart process with these steps mitigates risk of new product development:1. Define Your Objectives
Identifying the goals of your product development initiative will help keep your entire process on track with measurable checkpoints along the way. Your objectives should be agreed upon by your entire team and align with overall business objectives. Follow the SMART goal concept by setting objectives that are Specific, Measurable, Achievable, Relevant, and Timely. Here is an example of a product development SMART goal:
Goal: Increase revenue in the next 12 months by developing an innovative product line in response to customer feedback
Metric: Increase revenue by fiscal year-end
2. Focus on the Customer
Far too many companies jump into product design too quickly without doing their due diligence. Assuming you understand your customers, their needs, and how their needs may shift in the coming years puts you at a risk of introducing a product that fails - losing time, money and marketshare. Use these steps to ensure your existing and potential new customers remain at the heart of the product development objective:
3. Market Research
Market research shouldn’t be limited to focus groups. It’s important to get your hands dirty and conduct experiential audits such as in-home visits and voice-of-the-customer research.While it’s more time consuming, the rewards of conducting thorough market research will be invaluable.
4. Integrate Customers into the Entire Process
Existing customers and their knowledge can be a very valuable asset during product development. In this day and age, companies have the advantage of using online platforms to solicit feedback from customers whether it’s on social media, blogs, or forums. Take potato chip company, Lay’s, for example. They run campaigns from time to time where customers submit flavor ideas for the next product in a contest format.This can be considered a form of crowdsourcing, which may also be an option for companies developing solutions to meet the needs of users. This is where companies actively invite customers to submit ideas, challenges, and “must-have” product features during the development process.
5. Stay Ahead of Market Needs
While demographic data is critical during new product development, consumer buying habits can change in the blink of an eye. Truly innovative products are ones that actually shape the market by forcing users to recognize their unmet needs by introducing a new solution.Henry Ford once said “If I had asked people what they wanted, they would have said faster horses.” Rather than listening to customer feedback, Ford disrupted the industry with the Model-T (which ended up working well, anyway). Today, an effective way to adopt the innovative mindset is by embracing continuous learning and working with a team that has successfully developed industry-changing products.
6. Get Buy-in Ahead of Time
Brand new businesses often look to crowdfunding to obtain buy-in before the product development process is complete. Kickstarter, GoFundMe, and IndieGoGo are all popular platforms to secure funding for startups. To achieve the best results, offer an incentive or reward and clearly demonstrate how the users will benefit from the product.
7. Collect External Feedback
While your company may have an internal engineering team that works closely with marketing to develop new products, operating in silo puts your company at risk of tunnel-vision. Getting external feedback can help identify any red flags early on. Not only can partnering with a product design firm better ensure a successful solution, it can save your organization time and money as they have the resources to dedicate to market research, testing, building prototypes, and marketing the product.
8. Keep it Simple
Even though it may seem like consumers are looking for all the bells and whistles, when introducing a brand new product, you risk overwhelming users with too many features.Focus on the benefits over features and periodically ask your team: “What will users be able to achieve by purchasing this product? How will their lives change?”.
9. Test the Market
Testing your product concepts can help you collect initial feedback that’s critical to the future success of the solution. Even though you might think your product is the next big thing, consumers may not agree! To minimize this risk, test early and test often. Once you have a few product prototypes, test the concepts among a small subset of customers, collect feedback, and use the data to improve the product. Here are a few ideas to conduct small scale concept testing:
- Give away products in exchange for completing a survey
- Host an event where products are given out and verbal feedback is collected
- Launch a beta test or small scale product release
Launching a new product can be a stressful endeavor without the right team, processes, and expertise. Many of these tasks mentioned above are beyond the expertise of an in-house engineering team, so many businesses seek a product development partner to minimize risk.