Not All Concepts are Created Equal

Companies often spend a lot of time and money on consumer research to derive insights and develop innovative solutions to drive growth. If all this time and money is spent on getting it right, then why is the new product failure rate in FMCG greater than 85% within the first 12 to 18 months? Where does it go wrong? Concepts are currently a one size fits all approach both in their purpose and testing. The more innovative the idea is, the more difficult it is for the consumer to imagine or react to as a concept, which is why the most innovative ideas often test poorly in standardized test.

In the 20th century, most companies bringing a new product to market use some form of a new-product introduction model which is a good fit for an existing company where the customers are known, the product features can be spec’d upfront, the market is well defined, and the basis of competition is understood. Using this model, concrete concepts are typically used too early in the product development process so good ideas die prematurely, bad ideas are carried too far and learning opportunities are missed.

flowNew-Product Introduction Model

Think about recent successful innovations from Apple smartphones to Google Glass, would these radically new offerings have survived using this model? This is a good approach for existing categories but often falls short for innovative, new-to-the world offerings.

Driving growth through innovation for the 21st Century requires new models like the customer development model gleamed from the principles of lean start-up, new approaches to consumer research, and crafting and testing solutions in new ways. In the spirit of the principles of lean start-up there is lean consumer research where agility and co-creation is essential, along with new stimuli like minimal viable products (MVPs). New approaches will help ensure greater success in the market and help drive growth through innovation.

Different Stages, Different Purposes
When working innovative solutions, we need to re-think the purpose of a concept and how to test them.

A solution concept is a clear, concise description of the solution and the benefits it brings to the customer. It tells the solution story from the customer’s perspective, not the manufacturer’s perspective. It aims to resolve a known unmet need, or create desire for an unrecognized need. It answers the questions “What’s in it for me?” and “Why should I believe you?”

For innovative ideas, solution concepts help you help consumers get past their category-thinking, and understand their real needs, and desired benefits and solutions.
There are three different types of concepts each with a different purpose depending on where you are on the development cycle. Each concept is used at various development stages to address key questions to further refine and/or change the solution idea.

Seed Concepts are used upstream to help get clear on the consumers’ needs, jobs to be done and key benefits they are looking for. They are written to be generative, to co-create solutions with consumers using qualitative approaches.

Core Concepts are used mid-stream to understand the value proposition and begin assessing demand. They are much more descriptive and can be used for both qualitative and quantitative testing.

Selling Concepts are used downstream to finalize go-to-market strategies. They are designed to test core selling features such as branding, positioning, copy, visuals, and channel strategy. These are predominately tested via quantitative means.

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Purpose Key Questions Format
A tool to guide customer needs conversations, gather insights, co-create solution ideas with customers What are the most pressing needs and jobs to be done? What are actionable insights that feed into a solution idea? Open-ended, high-level, not consolidated, plenty of options, divergent (encourages brainstorming)
A specific, consumer-oriented value proposition to test with customers & refine Do we have a solution people will buy? How much demand is there, at what price, through which channels? Core solution description with clear benefits, reasons to believe, and call to action
A specific set of selling features (branding, positioning, copy + visuals, channel strategy) to ready a solution for launch What’s the best way to go to market with our concept? Do we have successful marketing execution? Solution description plus branding, positioning, copy, visuals. Marketing & comms strategy attached

There are Three Types of Customer Testing
Traditional standardize testing often falls short when testing innovative solutions concepts. This is especially true for new-to-the-world offerings where the target isn’t defined or comparative data doesn’t really exist.

The ideal is to bring these concepts to life, move them from a 2D description into a 3D form and ultimately a tangible MVP. Co-create with consumers and let these be a tool in your tool box to build, refine, and shape through-out the development cycle versus being concrete.

There are three types of customer testing for solution concepts:

  • Exploratory (e.g interviews, surveys, field research): The Exploratory Method uses ethnographic research techniques to collect first-hand data from and about a given customer type, and understand their stories, needs, behaviors, biases, receptivity, etc. Exploratory methods are used more heavily during upstream development for seed concepts where divergence and exploration of multiple ideas takes place however, this method continues throughout midstream and downstream development as well.
  • Pitch (e.g landing page tests, crowdfunding): The Pitch Method is about getting customers to give you a form of ‘soft’ or ‘hard’ currency by ‘pitching’ them a specific solution (idea/low-fidelity mockup/MVP) before the solution is fully built. The Pitch method is used during midstream development for core and selling concepts where the focus is on refining.
  • Concierge: The Concierge Method delivers a ‘manual’ version of your solution by hand-holding a small group of early adopters, collecting feedback on their experience. This method is used for both core and selling concepts.

There have been advances in our methods for understanding the consumer via cognitive behavior and decision science that are changing the way that we think about market research, customer insight and identifying jobs to be done, turning a decades-old model that depends on customers’ rational self-reflection into a much more adaptive learning environment that recognizes the inherent messiness of human thought and behavior.

When it comes to innovation, it is time to advance our method in how we take those insights and turn them into winning solution concepts. Companies that stick to the traditional approaches of creating and testing concrete concepts are bound to continue their high failure rate when launching new products versus those who adapt and structure their concepts based on its purpose and development stage.

Diane Prickel

Fellow

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