Many companies add new products and features to their portfolio to respond to emerging customer needs, surpass competitors, and grow their market share.
But how do they come up with new ideas? How do they know it’s the right product to pursue?
To come up with new product ideas, most companies perform five key research techniques. This approach allows them to explore all the possibilities for products and ensure they proceed with the product or features that will be most successful.
What is Product Idea Generation?
Product idea generation (or product innovation) involves gathering data and brainstorming potential ideas for new offerings or features. This process helps organizations develop new product ideas by combining market research, customer insights, and analysis to identify the most viable opportunities.
How Idea Generation Fits into Product Development
Idea generation is one of the first steps of structured product development. This step gathers market and customer data to uncover gaps and opportunities for potential products.
While this step helps spark new ideas, it also helps rule out the concepts that won’t succeed. In fact, 45% of all product ideas are terminated at this stage.
Assumptions, biases, and misconceptions can cause a company to invest in an offering they think customers want, missing out on products and features that customers will buy. That’s why even the companies that already have an idea in mind need to collect insights from this step to ensure that their product concept is viable.
Techniques for Generating Product Ideas
The best ideas come from in-depth data. By evaluating your target markets, customers, and current offerings, you can discover what products or features customers want most.
With 40% of new products failing, ideating based on informed hypotheses will help lay a solid foundation for your products to succeed.
These five techniques provide a structured approach to generating new product ideas and identifying which concepts are most likely to succeed.
1. Review your current product portfolio
Assess the products and features you currently offer through a product portfolio analysis. This research evaluates the level of success and identifies any gaps or service overlaps that may exist among your current offerings.
What you need to know:
- What is the ideal product mix for your target market?
- Would a new product strengthen or cannibalize an existing offering?
- Does your current product portfolio meet your customers’ changing needs?
- Would a new product overtax your resources
2. Evaluate how customers use your products
Assess how customers use a company’s products and how they evaluate them with a product attitudes and usage survey. This research gathers customer feedback to identify gaps and opportunities that can be addressed with new products or features.
What you need to know:
- How do customers use your products?
- Does their use align with your assumptions and your marketing?
- Are they getting additional use you are not tracking?
- Does the product not address the need that led customers to buy?
3. Assess customer needs
Analyze key elements of customers’ experience with your offerings through a customer needs assessment. This research identifies customers’ needs, pain points, purchasing behaviors, and the attributes they deem essential, allowing you to identify the products and features customers want.
What you need to know:
- What are our customers’ needs?
- Have customers’ needs changed, and how will they continue to evolve?
- Are our products meeting customers’ current and future needs?
- How can our products improve to address customers’ needs?
4. Understand key market drivers
Evaluate the future and potential risks of your target market with a key market driver’s analysis. This research evaluates market dynamics (e.g., key drivers and threats to growth) and evolving and emerging trends to understand the health and trajectory of the market. This allows you to identify the factors that can help or harm your products and evaluate the long-term viability of new product concepts.
What you need to know:
- What is driving demand for our products?
- What is the most important feature for customers buying our products?
- What trends might impact the viability of our products in the future?
5. Scope out potential markets
Look outside your current market to see if adjacent markets have a potential need for the products you want to develop or your current products with some alterations with an adjacent market analysis. This helps identify new opportunities to develop product ideas or expand existing offerings into new markets.
What you need to know:
- Are there new audiences or markets that would be a potential fit for our products?
- What is the size of these markets?
- What are their needs?
- Who are the competitors in this market, and what is their offering?
How Do You Evaluate New Product Ideas?
Once you have collected relevant data and a list of potential ideas, it’s time to identify which product to focus on. The best way to narrow down your ideas is to conduct a concept test survey.
A concept test survey allows businesses to gain targeted customer feedback on potential product ideas. The survey asks questions about the overall appeal, product and feature preferences, purchase drivers, and price sensitivity to different product concepts. This allows you to evaluate potential concepts against one another to determine which idea has the highest potential for success.
