Posted: April 22nd, 2009 in Addressing Consumer Needs
In a recent BusinessWeek article titled How to Think Outside the Box, Bill Buxton talks about going beyond the constraints of the current role and definition of technology, and instead focus on improving consumer experiences by paying more attention to “human” considerations, like how we live our everyday lives. While the article does a great job highlighting the need for technology to integrate better in our day-to-day lives , it made me go back to a fundamental mistake in many new technology-based products- lack of solving a true need.
Developers of new technology products often focus on “design” as a way to differentiate and get credit as being “innovative.” While design can be a very useful component in addressing the totality of consumer needs, many companies incorrectly assume that products based on unique and eye-catching design alone will rise to success. The recent focus on product design is often attributed to Apple and its legacy of successful new products over the last decade. Many argue that their products have been successful due to their sophisticated design – and therein is the underlying mistake.
Apple’s focus on design is twofold. The first and more obvious is to use design to make “friendlier” and more appealing products that enhance (often by simplifying) the user experience through hardware and software. But often overlooked is the other side – that Apple products actually address consumer needs. Their use of design is not simply for making good looking products, but actually helping users make the most of the underlying benefits of the technology. Combined with great business execution, Apple’s product lines have enjoyed growing success year after year visible from the company’s revenues that grew from almost $6 Billion in 1998 to over $32 Billion in 2008.
But successful new product development hinges on not just identifying the consumer need, but a much deeper understanding, including realization of the specific solution requirements consumers have. This is important, because a product that addresses the high level need, but fails to meet the specific solution requirements area will achieve only limited success. Innovators need to work on striking the right balance between meeting solution requirements and offering a good value proposition; failure to do so can severely limit market acceptance. Even Apple, recognized as the most innovative company in the world is not immune to this fundamental truth for new products, as it found with the initial release of the Apple TV set-top box that only achieved limited success (even CEO Steve Jobs admitted they missed the mark). While the product enabled consumers to access their downloaded media content (music, TV shows and movies) on their TV, it did not meet many of the specific solution requirements that consumers had (being able to download content directly, a good value proposition – consumers don’t want to feel like they bought another computer, etc). When Apple addressed some of these concerns in their second version of the product, sales triple over the previous year.
Companies need to focus on delivering relevant benefits to consumers, instead of simply offering new features in a pretty package. And the only way to really do that is focusing on solving the problem, and doing it right by meeting its requirements.
Posted: April 6th, 2009 in Addressing Consumer Needs
We often find that one of the most commonly overlooked areas of innovation is the consumer/customer input. Many companies ideate behind closed doors without any understanding of what the consumer actually needs or wants. This is probably the worst possible way to go about creating the next new product or service that will perform well in the marketplace. The way to have a higher percentage of success is to make sure that the product/service being introduced is solving current problems and meeting unmet needs.
Although employees within any given company might think that they know their consumers, often they have grave misconceptions, especially senior management. That is why it is so important to talk to consumers during the innovation process. The only way to change that perception is to actually go out and talk to consumers and collect real world information.
Of course, companies are often reluctant to spend the time or money in conducting upfront consumer-centric research. But the important thing to take into consideration is that the money and time invested in upfront research is actually minimal compared to the time and money put into a new product launch, especially if that launch is going to fail. Another aspect of upfront research is that companies often do not see the long-term far reaching benefits. Research undertakings can continue to inform new product and service development for a number of years, since in many industries consumers change somewhat gradually and research findings are relevant for many years (outside of drastic world events, like say a global recession). Additionally, the research findings can immediately help inform base business decisions.
Upfront consumer research (and continued research all the way through development) helps companies go in the right direction with new products, and actually saves costs. Consumers help to outline what new products need to have, and what they are willing to pay for. This helps to cut down the costs (and hopefully increase margins) also eliminate unnecessary additions - for example a high cost packaging technology when consumers do not really value.
An example of a new product that was recently launched that seems to have not fully taken consumers input into account is the latest iPod Shuffle. The new Shuffle is slimmer than the previous generation with a more sleek and minimalist look. This change came with a movement of all the controls from the shuffle to the earphones. Granted, some consumers might be very happy about this change, but many have complained about the fact that this now means that they have to use Apple’s earbuds, or similarly licensed earphones. iPod Shuffles are often used for exercising, and many consumers like to customize the earphones they are using based on what works best for them. With the new iPod Shuffle, they can’t use their favorite earphones without some kind of a proprietary adapter. The technology might be breakthrough, but it also greatly impacts the way that consumers can use the product.
Consumer research is the only way to identify potential problems with new products and services both before extensive development and launch. The greater the understanding of the consumer, the greater the likelihood of success.
Posted: March 23rd, 2009 in Addressing Consumer Needs
A lot of people seem to think that innovating in times like these should be the least of their concerns. After all, who has the luxury to think about new products and services when the economic climate is so grim?
Those who subscribe to this view argue that they simply can’t afford to be innovative given a contracting economy and fear of the future creating a constant check on business aspirations. A number of defensive positions are taken: 1. Innovation is a high risk game that looks a whole lot riskier when the future is so uncertain; 2. Pocketbooks are shrinking– who’s buying new or better when even the basics are less affordable?; and 3. Our budgets are shrinking - why invest in innovation and R&D when the core business is at risk?
Staying innovative is essential not just to future growth but sometimes – these times - to simply surviving within the present. And an innovation mindset must continue to inform strategy and drive change, particularly when weathering an economic downturn.
Though innovation often appears to be something of a gamble, it does not necessarily mean churning out new products or services or adopting new processes at high cost and heavy capital investment. Rather, it means responding intelligently to the needs and desires of existing consumers, being savvy toward the wider marketplace, spotting trends, and having the capabilities in place to pounce on opportunities before they are detected by competitors. Being innovative is, in other words, simply good business.
And while innovations - the real, touchable kind with specs and edges and new to the world stuff like smart features and sexy packaging, the kind backed by prototypes and pro formas – while these are the inevitable result of a company committed to understanding market needs, sometimes being innovative means being sensitive to what consumers don’t need. Take Hyundai, which found that rebates and other conventional sales incentives have little impact on car shoppers in the present economy and that their single concern is making payments. In response, Hyundai launched a program in January that allows buyers to return their car if they lose their job within the next year.
Recession, like any sweeping change in consumer behavior, does not mean putting innovation on hold. It means redistributing talent and resources around new opportunities. The companies that will emerge in today’s economy as the most innovative will certainly be those that discover ways to crack consumers’ reluctance to spend. They may also be those that acknowledge the need for fewer products, not newer products.
http://money.cnn.com/2009/01/05/autos/hyundai_assurance/index.htm