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The New Way to Innovate You Must Start Using Today!

When I get several requests in the same week on exactly the same topic, I know something is happening in the marketplace. This week was one such occasion.

A Pharma company wants a presentation on it; a CPG company asked me to give a half-day workshop about the topic; a conference requested a keynote speech about it; a major US business school wants a guest lecture covering the idea  and a consumer goods company wants an article for their newsletter. What’s the topic? The new ways to innovate, that’s what.

With all this interest, and despite having written some popular posts in the past on best-practice innovation, such as “ How to innovate more creatively”, “How to get R&D as excited about consumer innovation as you are”  and “Never succeed at innovation: 10 mistakes even great companies make”, I thought I would summarise the latest trends around how to innovate more successfully today. So here are some ideas to get you thinking about the changes you might want to bring to your own innovation processes.

Customers react to new innovation1. Start with the customer in mind – always

So many organisations still have an innovation process that starts with R&D or operations. It’s time to reverse your innovation funnel and start with the customer. (>>Tweet this<<) What are their problems with current products and services; what do they dream of having? How are they compensating or compromising?

 

If I had asked people what they wanted, they would have said faster horses” Henry Ford

“People don’t know what they want until you show it to them” Steve Jobs

However, as Henry Ford and Steve Jobs remind us, customers don’t usually know what they want. They are usually very clear about what they don’t like, but they also often know the solution they are looking for – even if they don’t express it as such. It is our job to interpret what they are saying into what they need. Therefore, identify the result they want but not how they want to achieve it, otherwise you will be looking for that “faster horse”!

2. Stage-gate innovation is essential for a successful business

Today’s world is fast paced and customers never stay satisfied for long. What surprises and delights today, is ordinary and normal, if not tomorrow, at best in a couple of weeks or months. That’s why it’s vital to work on new product and service developments even before you launch your latest offering.

NEW INNOVATION STAGE-GATESMany companies today work with generation pipelines, with three, four or five stages of innovation preparation. This ensures that they are already working on the replacement of each product they launch, whether or not it’s a success.

3. Line extensions can only do so much

Innovations risks opportunities

According to the McKinsey article “ Reinventing Innovation in CPG“, real growth comes from ground-breaking innovations, not simplistic renovations. However, line extensions do provide the time for organisations to prepare their true innovations, while responding to today’s customers incessant desire for novelty.

They are also easier to develop and launch, which means they are less dem anding on resources. Companies which are satisfied with only incremental innovations are unlikely to see significant growth in the long-term. For this reason successful br ands need to do both. (>>Tweet this<<)

4. Launch before you’re finished

Many tech companies use this approach, by involving customers as beta testers. In this way, they get their customers help – for free – to improve and mould the final offer. It also allows them to launch more quickly and gain the positive image associations of being first to market.

If you are concerned about confidentiality or competitive speed to respond, then work with customers through co-creation. (>>Tweet this<<) Involve them at every stage of the development process from ideation to launch preparation. If your management are  concerned about the risks of sharing innovative ideas outside the company, involve employees instead, perhaps from other divisions so they are less biassed.

5. Review the category in which you’re playing

Are you sure that your customers see your br and in the same light as you do? Many times I have heard a customer correct an interviewer in a research project, when asked about br ands in a category. “That br and isn’t in that segment, category A” they say; “It’s not a competitor of X, but of Y and Z, the main br ands in category B”. Some examples include dried soups which today compete with sauce mixes, carbonated soft drinks with fruit juices and body gels with shampoos.

Another advantage of underst anding the category in which your customers place your br and is that this can provide you with new ideas for expansion.

Mars ice creamMany confectionary br ands have moved into ice cream and desserts. They have understood that they are being seen as more of a “treat” than merely “just” a chocolate bar. When your customers choose between products from several different categories when deciding what to eat or buy, it is a clear indication that you are not (only) competing in the category you first thought you were. (>>Tweet this<<)

In conclusion, there are many reasons why innovations fail:

  • A short-term mindset where success is dem anded in weeks or months rather than years.
  • Top management instils a fear of failure, so no-one will defend ideas that are unpopular.
  • The innovation process itself is biassed towards current knowledge and skills.
  • A lack of deep customer underst anding.

These five ideas will help you to reinvent your innovation and also make it more customer-centric. After all isn’t that what all best practices should do today, involve the customer? If you have other – better? – ideas, then why not share them below?

Winning Customer Centricity BookThis post includes concepts  and images from Denyse’s book  Winning Customer Centricity. You can buy it in Hardback, Paperback or EBook format in the members area, where you will also find downloadable templates and usually a discount code too.

The book is also available on Amazon, Barnes and Noble, iBook and in all good bookstores. If you prefer an Audiobook version, or even integrated with Kindle using Amazon’s new Whispersync service, you’ll have to be patient just a little longer – but it’s coming soon!

 

 

This is Why your New Products “Crash & Burn”

Last month I invited readers to share some of the problems and challenges they need to address in 2014. I offered a free consultation to one lucky winner who asked the most interesting question, which could also be of interest for me to answer for other readers.

Well, the winner is Jean-Francois (JF) who has just started working with a start-up in the tech and app areas – I feel that’s more and more of us these days, don’t you? His question was:

“I would like to commercialize a new XXX; what would be the right approach to identify the consumer need and then the market potential, considering that the company has very limited financial resources?”

This is a great question and a reminder that not every organisation has access to large market research or marketing departments and extensive budgets. In fact, in many companies these roles are being h andled by one and the same person with very few resources; is that your case? If so then you will definitely find this post of interest, but even if it isn’t, I’m sure you will still find value from the ideas shared.

As I had promised, I gave Jean-Francois a one-on-one consultancy which ended up lasting several hours, as he had planned well for our session together. He also happens to be really passionate about his innovative idea, as well as in finding solutions to all his challenges.

The product JF and his team want to launch doesn’t exist on the market today, although there are some products which are unsuccessfully trying to address the perceived customer need. The proportion of product launches which fail every year is generally “accepted” to be about 95% – although why companies continue to accept such levels is beyond me! With such odds, I think it is incredibly courageous to start a whole company based around just one new product idea, but that seems to be the norm in many areas today.

Let’s start by taking a look at some of the reasons new products fail and identify ways to reduce if not completely eliminate them for your next launch.

  1. New product Process wheelThe process itself: Innovation is by definition a creative process, but many organisations use a well-worn, restrictive and uncreative process to develop their new products. They are at best most likely to come up with renovations than true innovations. The solution is to introduce some creativity into the process, and why not include potential customers in the process too?
  2. Meeting company quotas: It is surprising that with such miserable statistics concerning the likely success rate of new products, that so many companies – and which shockingly include many of the largest CPGs around – fix quotas on the number of annual new product launches. How crazy is that?! It just encourages too many new products to be launched too early, and almost guarantees failure! I believe it would be much better to seriously limit the levels of acceptance amongst all new product ideas proposed in any year, then only the best would get through.
  3. Lack of customer underst anding: This is most likely one of, if not the most important reason for new product launch failures. And I don’t mean that you should ask the customer what he wants, he doesn’t know until you make it available to him in many industries. No, I mean starting by looking at a customer’s lifestyle and seeing how you can make it easier and more enjoyable for them. If you already have a new product idea, which was the case for JF, then consider how it would make the customer’s life easier or better. If it doesn’t, then you perhaps need to reassess its market appeal.
  4. Lack of category underst anding: This follows on from customer underst anding, in that you need to identify how the customer is currently working around or compensating for their need today. Don’t assume you are competing in a certain category until you have identified what the customer is currently doing or using. That is the way to identify your true competition.
  5. Not living up to your promises: If you promise a better, cheaper or more enjoyable experience, then customers deserve to be able to confirm this if they buy. Especially in today’s connected world, if you disappoint by not meeting customers’ expectations, your product will fail even more quickly than in the past, since early-adopters will Tweet or leave comments on Facebook, Blogs or other social media platforms for all to see.
  6. Not being sufficiently differentiated: Following on from living up to your promises, customers need a reason to change behaviours, and depending upon the category this can be costly, whether in time, money or effort. Many customers prefer to continue buying an inferior product or service than making the effort to change – think Telecom, Banking, Hotels, Air travel or Insurance as some of the most typical examples of such industries. These businesses are in a constant battle to differentiate themselves and provide a real advantage to attract new customers.
  7. Being too different: Whilst not being sufficiently differentiated can be a certain cause of failure, being too new can also meet with no success. The reason for this is that if customers are totally unfamiliar with the new product or service offering, you will need to spend considerable resources to educate them. If you are unable or not willing to invest the time and money in doing this, then you will undoubtedly fail to attract more than just a few customers who take the time to underst and what you are offering.
  8. Correct pricing is key to NPD successPricing yourself out of the market: Here I’m not just speaking of pricing your product too high; being too low can also negatively impact your likely success. Underst anding how much potential customers value your offer to essential to the success of any product. Getting it wrong can result in lost revenue or worse a promotional spiral leading to br and hell (read more about this in “Are you on the way to br and heaven or hell“)
  9. Inappropriate distribution: This can be the consequence of an incomplete underst anding of your customer and is also linked to differentiation. Whilst you can just follow near competitors into their own distribution channels, why ignore the possibility of being available where and when your customer might buy it most? By reducing the effort necessary to change their habits and buy, you can attract more potential customers to at least try your new product.
  10. Being too far ahead of the customer: There are many examples of great products that were ahead of their time. Gillette brought out 2–in–1 shampoos with conditioners included in the early 70’s, but they were a dramatic flop. Ten years later most personal care manufacturers offered these products, and were met with huge success, even if such products have gone out of fashion somewhat since then. It took Nespresso almost twenty years to become profitable and Philip Morris has needed similar levels of patience for their most infamous of br ands Marlboro, in many markets. If you can’t afford to wait for your customers to catch up with your new product idea, then you should certainly reconsider your launch decision.

These are ten of the most common reasons for new product launch failure. Which do you think is most prevalent in your own company? What are you going to change to increase the success of your own new products? Is it some other reason altogether, that I’ve missed? Let me know and share your thoughts below. 

Coming back to JF, most of our time together was spent discussing ways to collect information on many of the above points. As he has little budget for extensive market research, it was important for him to find other ways of gathering the much needed information and not to just bypass that stage; perhaps many people don’t bother to search out the information they need to truly assess the likely success of their new product, which would explain the high failure rate mentioned above.

By the end of my session with JF, he had a clear plan of action and I have since heard that he is progressing incredibly fast, so watch this space for an announcement concerning the launch of his new device.

I will be sharing the tips I gave him in a future blog post, but in the meantime feel free to continue sending me your own questions; I’m always ready to have a short Skype or phone call to assist you with your own marketing and innovation challenges.

C³Centricity uses images from  DreamstimeKozzi  and Microsoft

STOP Emotional Innovation!

Last week, I posted about making innovations more emotional; if you didn’t see it, you can find it here. Today, I want to speak about the other side of emotional innovation; how to STOP some of your own emotions, when launching new products.

One Sunday last Summer I had been planning a lie-in, like most of us do when we don’t have to get up for work at the weekends. However, I was woken up very early by one of my cats who came to proudly show me that she had caught a bat! 

Both my cats love hunting and I have to say they are (too) good at it! They give me frequent “presents” that I discretely dispose of, unless of course they are alive, in which case I have to catch them and return them to the wild outdoors, whilst the two of them continue to sniff around the last place in which they had seen their prey.

Anyway, my cat Apricot – a female ginger – was really excited about her very rare capture, which is why she had woken me up to show me. Of course, I was less than enthusiastic about a bat flying around my bedroom at five in the morning! Luckily when I switched on my bedside lamp, the light quietened it down and when he stopped flying, to hang on the wall, I was able to catch him and put him back outside where be belonged.

 

Do your innovations excite you or your customer?

Now awake, my mind started musing on the very large differences in the reactions of my cat and me, to this event. She was excited, happy and proud; I was surprised, disappointed and irritated that I had to stop what I was doing – sleeping – to attend to her “present”.

I think something similar happens sometimes when companies launch new products or services. Everyone in the organisation gets excited about their innovation or renovation, are proud to have developed it and happy that after all the hard word, it is finally ready for launch. The customer on the other h and, can be surprised, which is great if this is accompanied by pleasure, or disappointed if the promise is not delivered. However, he might also be irritated if his usual br and or version has been replaced and is no longer available, or at least no longer on the shelf or store in which he usually finds it. We are in fact asking him to work, to change his habits, which no human being really enjoys, even when it is for the better.

 

5 Questions for winning innovations

So how can you make your new product development more customer-centric? By starting from your target customers’ perspective, and by answering these five questions:

  1. How are your customers currently using your product or service? What are their pain points if any; price, packaging, size, availability, sensorial experience – taste, aroma, colour, sound, feel?
  2. Who is currently changing or has already changed their habits to compensate for these pain points? Your current regular users, occasional users, lapsed users, competitive br and users?
  3. What are your current customers doing to face their pain points? Are they only buying on promotion, buying several small packs at a time, buying a replacement br and, buying elsewhere, adding their own ingredients?
  4. Where would they rank each of the identified pain points in terms of priority and acceptability? Can they cope with buying less often to get it at a cheaper price? Do they have a “portfolio” of acceptable br ands from which to choose in the category? Do they transfer your product into another container for ease of serving?
  5. When do the pain points become so unacceptable that your customers would consider changing br ands or adapting their behaviour? Are there psychological price barriers in the category or for your br and? Are there category st andards of colour, size or packaging that need to be obeyed – or perhaps even broken?

Obviously best-in-class innovation and renovation starts with the target customer in mind; their rational needs AND emotional desires.

Based on the answers to these five questions, the most relevant products and services can be proposed and are then more likely to be met with positive excitement, pride and happiness, rather than negative surprise, disapointment, irritation and frustration.

 

Involve your customers in your innovation

A further idea about customer-centric innovation is to actually involve your customers along the whole process. Many organisations now run what are called “co-creation” or “co-elaboration” sessions, where ideas are shared with and then further developed with customers in live sessions, either in person or over the web. How about co-creating your next new product idea with your customers? That way you know it will delight them even before you launch.

Do you have any other points you would add to the above list? Have you had success in co-creating a product or new service recently? Please share your experiences, I would love to hear about them.

This post first appeared on April 28th 2011 in C3Centricity Comments

More information on improving your innovation and conducting co-creation sessions can be found here: https://www.c3centricity.com/home/vision/

C³Centricity uses images from Dreamstime.com

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