Innovation and Market Research: A Balance Between Risk and Reward
Does your business have competitive advantage that ensures a strong position in the market and can you keep it? This is one of those questions that can give a business person nightmares, but at the same time it is (probably) one of those few questions that any businessperson asks themselves again and again.
What is even more frustrating is that the answer to this question is never really fully answered. The business environment continuously changes: new competitors emerge, customer buying habits and preferences shift, etc. All of this means that the business proposition has to change continuously.
To deal with this, many organisations apply innovative thinking to different aspects of their business: their products, services, distribution channels, marketing… and rightly so! These days, if you don’t adapt to change, your strength in the market will eventually fall.
Price comparison sites can be considered an example of consumer-focused innovation. They provide customers with a new, powerful way to search for products that meet their needs. Many companies have to acknowledge, consider the effect of and respond to this new mode of business. They need to take into account what they offer – making it easier for the customer to switch, giving them more choice which in turn makes it harder for the business to retain custom.
The Innovation Process
So we go back to the drawing board every now and again and come up with ideas of new, different, better, unique business models. Terms like ‘revolutionary innovation’, ‘evolutionary innovation’, ‘funnel approach’, ‘stage-gate process’ and many more have become part of the vocabulary of all innovative thinkers out there.
Since the main purpose of business innovation is to give that business an ‘edge’ it is understandable when businesses are protective over the ideas they come up with and approach market research at such early stages with reservation. All those from customer insights teams are probably familiar with responses such as: “We’re not ready yet”, “We are still considering different options”, “Once we have a better idea about what we want to do, we’ll be in touch”.
But what creates this hesitation to show your hand of innovation cards? Intellectual property.
The Effects of Intellectual Property
IP is an important aspect for any business. Coming up with the idea that flies is not easy. Many brainstorming techniques and idea development management strategies are designed to help separate the good from the bad.
During these very early stages of the design any detail can be commercially valuable and when business can’t put a trademark stamp on an idea yet (and the idea is rather good), the last thing any innovative thinker wants is for the competition to beat them to it! It’s understandable why they may want to keep the drawing board behind the closed doors and wait until it’s further down the development process.
In addition to this, timing is crucial. The longer a business thinks about it, the longer they prepare, consider and re-analyse the more time they leave for competitors to catch them up. A longer process also means higher costs and with the new product that is not contributing to sales yet, it never looks good on the balance sheet. No innovative thinker wants to have an enemy in the accounting and finance departments. Let’s not squash the idea before it got a chance to get off the ground…
How Can Research Add Value to Innovation?
The aim of any product, innovative or not, is to meet the needs of the customer. The greater the link between the two, the better the chances of a successful and long product life. Finding out what the target market thinks can give a valuable insight into the direction of the development of the innovative idea and the path it should take.
Because of this, market research and innovation can be seen as a balance between the risk and reward. The risk is that customers may find out about the innovation before the business wants them to; the reward is having a better understanding of how to tailor innovation to the target audience.
In the world of products, people and pipelines, using market research to educate the innovation model is crucial. It means the business can better engineer a product that will work for customers, through a pipeline they understand.
An Innovative Research Solution
Consider Testing Concepts Without Revealing their Full Extent
Fortunately, there is a middle ground: combining opinion gathering from customers without revealing too much about the idea, whilst still moving fast enough so that the development process doesn’t lose momentum.
To do this, consider 3 things:
Focus on customer benefits – you won’t need to reveal any commercially valuable information about the product’s features, design or how it works. Instead, find out whether the new product benefits the customers in a way they would want it or expect it to.
Do it online – it’s obvious that online shopping, online banking, etc. is faster than going to the store or local branch. The same applies to market research. If you are worried about timing and want to get the product out there as soon as… don’t let anything slow you down. Use online market research to get feedback from customers instantly.
Let those with experience help you so that you don’t waste time and effort on figuring out how to run online research all by yourself (unless of course you want to).
To discover how to merge online market research with innovation, read more about our tools. Or to book a free demo of our powerful online market research software, contact our experts.