I’ve just realised that everything I thought I ever knew about Market Research, when it comes to testing innovation, was either flawed or is fast becoming redundant. If, like me, you have employed traditional market research approaches (i.e. concept tests, market simulation tests, focus groups, etc) to evaluate and validate your innovations, then allow me to expand on my epiphany….as it may serve you well too.
I recently joined the team at Inventium as an Inventiologist after spending the better part of my career in corporate roles in Innovation and Market/Consumer Research. I joined Inventium with first-hand experience in nearly every type of traditional market research tool in the Innovation space. Some MIGHT say that I was even a little smug in my knowledge of this subject…
But after only a few short weeks of immersing myself in Inventium’s best-practice innovation tools and the research that back them up, my smugness began to wane…badly.
I soon realised that the type of market research that’s required for innovation is shifting and is moving away from the traditional techniques that I was all too familiar with.
Why? Well, for a few reasons:
- Firstly, there’s intensifying competition and a rapid rise of entrepreneurs who have access to a global online marketplace. They’re getting to market more quickly and leanly and big businesses are struggling to keep up with this new pace. As Eric Ries (author of The Lean Start-up) famously said, “The only way to win is to learn faster than anyone else”. In a world where Start-ups can take an innovation from idea to prototype in a day, it doesn’t bode well for lengthy market research approaches that take months to conduct.
- Innovation is often a key pillar in big business growth strategy, yet for every innovation success there’s often several, more costly, innovation failures – even after seemingly impressive market research results. Many businesses are beginning to lose faith in the traditional market research approaches where they’re seeing a big disparity between what people say they will do in the research versus what they ACTUALLY do in-market.
- Business cost scrutiny seems to be at an all-time high. We hear from our clients that there are ever-demanding pressures placed on them to deliver increased profits, margins and shareholder returns AND to reduce costs. No longer can they afford to religiously invest in elaborate and costly market research methodologies, particularly when the validity of the results often comes under question.
- Finally, ‘disruptive innovation’ is often seen as the holy grail for growth, ever since Clayton Christensen coined the term back in the late 90’s. Disruptive innovation typically targets completely new customers and creates entirely new markets to that which currently exist. Therefore, employing traditional market research approaches, which are often tailored to support the core business and service the needs of existing customers in existing markets, are not always viable – or reliable.
To overcome these challenges, at Inventium we recommend replacing these outdated market research approaches with an ‘Experimentation’ stage for testing innovation.
The whole premise behind an experimentation approach is to learn fast (or fail fast), with real customers, in a real market-place, to determine as quickly and cheaply as possible if there is value in an idea. The approach utilises scientific method to produce validated learnings, to determine if and how your innovation is likely to be successful, prior to implementation. The end goal being to avoid any unnecessary investment in ideas that aren’t working and to quickly change or pivot the strategy if necessary. Adopting this approach means businesses are able to learn in real-time and experimental data is based on actual customer behaviour rather than intentions, which, for a new market, is the most reliable.
Previously I’d thought that lean experimental approaches were the domain of groovy tech start-ups and didn’t possibly apply to the world of big business. But now, I’m beginning to realise that my thinking was flawed and that this kind of approach is perhaps the only way forward for big businesses trying to remain competitive in this new faster-paced world.
If you’ve run any experiments recently, I’d love to hear from you!
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