Insights from OnePulse CEO, Mike Billingsley, on concept testing in a post pandemic era.
Every year there are 30,000 new products introduced in the US. Of those new products, 95% fail according to Harvard Business School professor Clayton Christensen. This is why concept testing is crucial for any business when looking to bring a new product or innovation to market. Concept testing determines there is demand for a product, and thus, increases the chances of returning a profit.
The key to concept testing, and business success in general, is to understand your customers. Something that has become more important than ever since the pandemic, as people have become more mindful with how they spent their money.
Not doing proper concept testing can have devastating repercussions for any business.
Perhaps your customers don’t like your new logo - like MasterCard’s costly $1.5million rebranding fail in 2006. Or, you’ve completely failed to understand your target demographic with your latest campaign - like McDonald’s Arch Deluxe burger that targeted a more high-end clientele than its regular customer base.
Although it’s these major cases we tend to focus on, business and idea failures actually happen all the time. And while they may not be seven-figure losses, they do carry a significant cost. Aside from lost revenue, there are also the costs and resources associated with developing the failed strategy, as well as the costs from the subsequent changes made to redeem yourself and potential long term brand impact.
You may be able to deal with the occasional oversight, but consistent business failures will see costs in time, money and reputation begin to stack up. Once you truly understand the cumulative impact of not concept testing, it becomes clear that it’s a no-brainer.
In new research conducted by EY, there are five different groups of consumers that have evolved since the pandemic:
● Affordability First (32% of consumers): Living within their means and budget, focusing less on brands and more on product functionality.
● Health First (25%): Protecting their health and that of their family, choosing products they trust to be safe and minimizing risks in the way that they shop.
● Planet First (16%): Trying to minimize their impact on the environment and buying brands that reflect their beliefs.
● Society First (15%): Working together for the greater good, buying from organizations they find to be honest and transparent.
● Experience First (12%): Living in the moment to make the most of life, often making them open to new products, brands, and experiences.
This shows us that consumers aren’t static; their behavior is constantly evolving and it is only through concept testing and regular market research that brands can maximize their chances of bringing a successful concept to market.
There’s a misconception that concept testing has to be a lengthy process, when a lot of the time it's just a matter of asking three simple questions to your target audience to ensure that you’re keeping your finger on the pulse and your head in the game.
In fact, consumers like being asked their opinion and getting their voices heard, as long as they aren’t asked too many questions too frequently.
So next time you think you might just have discovered the next big thing, pause and take some time to ask the people that really matter - your customers.