How to leverage research to develop fail-proof products
A successful product strategy allows companies to respond to evolving market dynamics, win and retain customers, and increase their profits. However, building successful products is not easy, and the failure rate of products is 40%.
Creating products that align with customer needs, outperform competitors, and capture market share requires two things:
In this article we will explain how to build a foolproof product strategy and the key research and insights you need to collect and analyze throughout the product development process to successfully launch your products.
A product strategy is how companies set the direction and focus of new or existing products. A strong product strategy allows businesses to evolve and align with current market demand, stay competitive in their existing market, and expand into new markets.
There are four different product strategies based on whether companies are expanding their product capabilities, their market share, or a combination of the two.
Most companies choose more than one approach. The specific mix will vary depending on the company, its current portfolio, available resources, business goals, appetite for risk, and other market factors.
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While you may already have a product plan in place, if you are experiencing new or ongoing business challenges, your product strategy might be both the problem and the solution.
Here are some common signals that a new product strategy is necessary:
If any of these seem familiar, it might be time to evaluate how your products can evolve to tackle your business’s biggest challenges.
The right product strategy mix for your company depends on your goals, resources, current product portfolio, and market opportunities and limitations.
Ask yourself the following questions:
Before you start developing a plan for your products ensure that the predicted benefits of your strategy align with the goals of the company. Doing so can also help add weight to your requests for company investment in your strategy.
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On average 40% of product launches fail.
There are numerous reasons why:
With companies spending an average of almost $100,000 on creating a product, plus the time and resources dedicated to its development, it’s a hefty investment to leave to gut instinct and chance.
While some of the above situations are inevitable, there is a way for companies to protect their investments and minimize unsuccessful launches: Market research.
Research allows companies to identify early signs of product failure and either address these challenges by altering the product or pivot investment to a more promising concept.
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There is a variety of research companies can conduct, often tied to which stage of the product development process they are in.
Gathering in-depth insights is critical to understand market potential and customer needs, fine tune product elements, and evaluate the success of a product launch. Data-backed research provides companies with an average of 15x ROI and saves them 1.5 months in development.
Before you start developing a new product it is critical you assess the current state of your company and your target market.
A product is a long-term investment, the success of which is highly dependent on shifting market factors. External elements like customer demand, industry regulations, and shifting economic factors will impact customers’ need and willingness to buy.
This research evaluates the potential for business success and customer behavior by analyzing market demand, size, trajectory, trends, and key competitors. These insights help companies identify areas of opportunity and uncover potential risks that might affect business success.
Your competition will impact how successful you are. You need to know who they are, what their offering is, and your similarities and differences.
Understanding your brand's health and strengthening your brand equity is crucial. If your brand is unknown (or unliked) your products are going to struggle to succeed.
Measures the strength of your brand and competing brands while identifying how much the role of branding leads customers to use products or services. This provides insights into a brand’s health and influence, highlighting strengths and uncovering weaknesses that need to be addressed prior to building something new.
Identify promising product ideas that enhance your capabilities, increase your market share, and align with what customers want.
Examine your current products to see what new features or complementary products can strengthen your market presence.
A product portfolio review assesses the level of success, gaps, and any feature overlap of all the products a company offers. This provides insight into untapped opportunities, potential risks, as well as the most needed enhancements customers are searching for.
This research assesses how customers use a company’s products and how they evaluate them. Sometimes, customers find new ways to leverage products for their needs that differ from the original intent. At other times, customers find that products are not sufficient to meet their original needs. It’s important to analyze how customers use and evaluate products to identify gaps and unknown benefits that can be further enhanced
To build products people will buy you need to understand what they want and what will motivate them to purchase.
A key market drivers analysis 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. It allows companies to uncover hidden gaps, untapped opportunities, as well as potential risks.
Identifies key elements of customers’ experience with a brand, product, and service, including needs, pain points, challenges, purchasing behaviors, and what attributes are essential. This allows companies to identify gaps in their customer service as well as opportunities to build products customers need.
New products or product enhancements increase the value and benefits of what your products have to offer. Look outside your current market to see if adjacent markets have a potential need for the products you are developing.
This research analyzes adjacent markets to identify the markets size, trends, and competitors as well as assess if there is potential need and demand for existing products. Though these markets might not readily accept a product as is, with some targeted product enhancements, a product may be able to access a whole new consumer base.
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Take all the potential ideas you generated and evaluate them against each other and their potential for success.
Customer demand should be at the core of your product development. After all, a product can only succeed if customers are willing to buy it. Ensure the products you are making align with customer preferences by collecting customer feedback.
A voice of customer analysis provides critical insight into the customer experience, including expectations, preferences, and habits, to understand how to most effectively reach your target audience through quantitative data analysis and qualitative feedback.
Customer satisfaction surveys evaluate how happy customers are with a company’s current products, services, and overall experience. This research helps identify the weaknesses in customer experience and evaluate if the planned product enhancements will be able to address these gaps.
Product concept testing gathers feedback from a target audience to test company assumptions and identify the viability of product enhancements. Insights from this survey can be used to inform further concept refinement.
Test, adjust, and review every product aspect till your initial concept is refined into a working prototype
Products don’t always work as intended. To ensure the product contains the elements that matter most to customers and effectively address their needs, you need to test them.
Collect data on customers’ potential usage behavior, preferences, and reactions to the updated product by allowing them to use the product before it launches. Testing products early allows companies to quickly identify any problems and conduct further enhancements to the product to ensure it will have a successful launch.
This survey mimics real-life choices by measuring stakeholder preferences and tradeoffs on features, attributes, products, or services to infer preferences. This research can help identify the most desirable product enhancements while also identifying potential risks.
Identifying the right price is critical to product success. If a product can’t generate revenue or fit into the price range of an existing portfolio, it is considered unviable. In fact, 21% of products are found not viable at the pricing analysis stage, regardless of how well the product had performed. To minimize wasted investment and avoid building and launching a product with poor ROI, you need to ensure your product will generate sufficient revenue.
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Now that your products have been developed, tested, and optimized, it’s time to prepare your launch strategy.
Design enhanced service strategies by identifying the varying characteristics of your customers.
Customer segmentation is the process of collecting demographic and behavioral information about customers and separating them into groups with similar characteristics and motivations. This data allows companies to develop more targeted, influential interactions with current and potential customers, ultimately reaching those customers more effectively and increasing sales.
Develop effective outreach strategies by understanding where your customers are active and what messaging resonates with them.
This research leverages direct customer feedback and message analysis to identify which themes will resonate with the target audience, ensure the updated product stands out, and engage customers.
This research involves evaluating historical channel performance, reviewing competitors’ channel strategies, as well as collecting direct feedback from customers to determine the most effective mediums to reach and engage clients. With this data, companies can identify the best channels and tactics for distributing products and reaching their target audience.
Evaluate how the product is performing compared to expectations and goals and spot potential improvements or refinements.
Identify the key touchpoints along the path purchase to develop sales and service strategies that meet customer expectations.
Identify the full customer journey from awareness and consideration to purchase and retention. By researching how customers interact with a brand and its products, companies can uncover what strategies are not working and identify opportunities for improvement.
Learn customers motivations for buying your new product or why they chose not to purchase to identify your product’s strengths and weaknesses.
A win loss analysis evaluates won and lost sales to evaluate the performance of sales strategies, product offerings, and customer experience. This research helps identify key factors of the buying process, including customer pain points and gaps in sales positioning, product features, and service offerings that are turning customers away.
Measure how customers view your new product and your overall company. Is your new product solving their pain points or does your new offering fall short, damaging your brand name?
Companies should reissue a customer satisfaction survey postlaunch to evaluate how product enhancements have impacted satisfaction and whether any new issues have arisen with the new updates.
Changes to a product will affect a brand’s image. It’s important to track how brand perception has changed, identifying the negative feedback that should be addressed and the positive feedback that should be leveraged and incorporated into sales and marketing strategies.
Download our guide to determine and implement the right product strategy for your business.
