This article is an extract my original contribution to Quirks magazine Nov 2017 that can be found here : https://www.quirks.com/articles/innovation-and-the-story-of-a-drunken-man
The story of new product testing in the industry strongly echoes the tale of the drunken man trying to find his keys under a streetlight at night. A passerby asks him, “Are you sure you lost them here?” The drunken man answers, “No. I lost them in the park behind me.” The passerby then replies, “So, why are you searching for them here?” “Because the light is much better here,” answers the drunken man.
This story portrays the reality of new product research practices today: everyone is rushing into one-size-fits-all methodologies, mostly because they are fast and cheap, but they rarely question whether anyone has ever found the keys to success here. Submitting a nice marketing concept to consumers via an online questionnaire asking for their purchase intent (or any derived magic indicator) will at best help you eliminate the terrible ones but hardly predict future success. Of course, everyone has an excuse for that: There is a long road between idea and execution and it’s hard not
to fall into the many traps of new product development. At least testing concepts serves to align functions behind a convenient norm: the shared “light” everyone uses. But deriving a sales forecast from a few clicks on a concept is another story.
Concept testing had some true merits
Looking back in history, concept testing has had some true merits for CPG. It was born in a time when television was the
queen of media and advertising was the No. 1 marketing tool. The art of persuasive copywriting helped create the first “concepts” traditionally known as a combination of insight, benefit and reason to believe.
“Positioning” brands was the new mantra and concept-writing was soon extended to new products. Testing in a concept form was quickly adopted as a fairly good proxy to measure consumers’ new-product acceptance.
This is mainly because, at that time, supermarkets were hungry for more items and consumers would often buy into marketing promises. Since then, new product concept testing has been institutionalized in a Stage-Gate process: a series of hurdles to help prioritize initiatives before they move further into the R&D funnel.
This was the golden age of marketing and using concept-based tests certainly helped harness the overwhelming creativity of marketers. However, no evidence proved that companies using concept-based tests were any better than those who did not. The failure rate for innovation has always been debated, mainly for its rear-view of norms and idea-killing reputation.
Co-creating with consumers as an alternative ?
A couple of years later, an era when shelves became saturated, the media landscape started fragmenting and brand trust was eroding; the rise of social media networks also helped empower consumers. After using consumer responses to filter out concepts, technology would now allow communities to participate in concept co-creation but the call for ROI
evidence remained. With digital acceleration, marketing can actually do “faster and cheaper” but, in fact, they keep doing more of the same thing: concept-based tests as a proxy to a reality that does not exist anymore. But because it is easy, fast and cheap to collect this questionnaire-based data, that is where the light remains for most companies. Unfortunately, that’s probably not where the keys are.
While marketing research firms were industrializing their concept-testing factories, new players like design-thinking firms successfully entered the innovation arena. They come from an opposite premise: You can’t separate ideas from execution. To evaluate consumer appeal to a value proposition, design thinking has been promoting the use of empathetic observation instead of asking questions and early prototyping instead of concepts. The new agile project management methods inspired by startups are backing their credibility, as they are informed by entrepreneurs’ real-life success and failures. Experimentation is the new mantra to capture true prospect engagement. Real user experience with touch-and-feel prototypes has also become the best way to design faster, more innovative value propositions that work.
This shift in ways of working found positive feedback in many companies that would cease asking large samples of consumers to evaluate their marketing story but instead observe a select few in context. Having consumers use the new product prototype, marketers see with their own eyes whether prospects find the expected level of utility and learn from
there. The question of standards remains unsolved but the sequential paradigm of ideas screened prior to execution has been replaced by iterative evolutions of viable prototypes, in the digital and start-up culture.
An idea isn’t just good or bad, it can become “great” from early fails turned into improvements. The question of when this is good enough is still around but successful entrepreneurs suggest that embedding business models creatively with iterative feedback with consumers is what makes execution flawless with the right level of costs. Maybe this is where the
keys to viable market fit are: designing an adaptive value-based business model.
Behavioral economics : where the keys to success lie ?
Recently, academic researchers (in behavioral economics, social psychology, and neurosciences) have documented a number of behavioral insights that can now help marketing better understand what the key success factors for innovation are . If you want to discover them, you can read the full article :