“In order to make an apple pie from scratch, you must first create the universe.” – Carl Sagan, Astronomer
Creating new products can be complex but it is not as complicated as the above quote suggests. Rather, I think new products need to withstand a feasibility test, also known as a concept test. This feedback is critical for a new offering.
Sadly, most entrepreneurs don’t properly test their ideas. Former Apple evangelist Guy Kawasaki joked that at Apple that new products only required a funky name, a few thousand t-shirts, and a media blitz—then they would figure out what the product’s
specifications would be. Apple is greatly admired for innovation, but I wonder if they might even be more successful if they did more concept testing.
Concept testing can use qualitative or quantitative research methods; most commonly, qualitative tools such as in-person interviews and focus groups are chosen for their expediency and live feedback. Essentially, prospective customers are given an early viewing of an offering to assess their reactions before the provider invests more money in the new offering. It forces the entrepreneur to expose the offering to the customer base to solicit real feedback. The test verifies that the benefits of the offering are recognized and valued by the customer. This feedback is essential but sometimes difficult for the entrepreneur to accept, particularly if the feedback is negative.
Sometimes, the test identifies problems such as possible confusion about how the product is positioned with competing products. Often the marketing messages are still in draft form, so this concept test also assists in refining the basic messaging. In fact, concept tests are frequently performed for advertising campaigns to verify that the target customer can understand the benefits of the products.
However, concept testing may not be a good indicator of purchasing behavior. Just because someone understands the benefits of a new product and even admits to liking the product, it does not mean that they will buy it. Additionally, concept testing may identify product attributes that are significant but this type of research can struggle to assess which attribute is more important.
Concept tests typically try to answer the following questions:
1. What is unique about this new product or service concept?
2. How does it compare to competitive offerings?
3. How might it benefit the customer?
4. What are the relative strengths and weaknesses of the new product or service concept?
5. Would the customer buy the product?
Ironically, many startups and entrepreneurs go to market without conducting a concept test; instead, because of their strong belief in the product or service concept they often elect to skip this step. The ramifications are many including failure.
John Bradley Jackson
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