Request a Quote

Measuring Product Innovation

While demand generation receives a tremendous amount of focus in terms of creating revenue, it’s hard to generate demand if you don’t have something people want to buy.   A product whether tangible or intangible is the kingpin for generating revenue. One of the most important aspects of Marketing is to support the product/service innovation pipeline. So while Sales and Marketing are partners in creating the customer opportunity pipeline, Marketing and product are partners in creating the product innovation pipeline.

Marketing should regularly monitor and capture customer and market trends and needs that will support the product ideation process. Just as many organizations measure the volume, cost, value, velocity, time to close, and win rate of customer opportunities generated by Marketing, organizations should set comparable metrics for Marketing when it comes to the product innovation pipeline. Six metrics to consider include:

  1. Volume– the number of ideas and concept generated,
  2. Value – the potential revenue that the product would generate
  3. Cost/idea– the cost to create the concept and ultimately the product
  4. Velocity– the rate at which the ideas convert from one stage to the next
  5. Go-to-market rate – the number of ideas that actually become products that will go to market
  6. Product adoption rate – the rate at which the new product was adopted in the market.

Similar to objectives and programs designed to affect the customer opportunity pipeline, Marketing should create measurable outcome-based objectives and performance targets for programs designed to impact the Product Innovation Pipeline.

Your Innovation Pipeline Needs Metrics

Metrics for Measuring Your Product Innovation Pipeline Success

Establish a process for moving ideas forward

The stage-gate method developed by Robert Cooper, is a common approach to new product development. Be sure to set performance targets for each stage.

Ideation is the first stage. Once Marketing generates potential ideas, those ideas that meet the internal gates need to be turned into concepts. Smart companies typically test design concepts to determine which idea will resonate best with buyers and should therefore be moved forward into the innovation pipeline.

How might Marketing help evaluate and select concepts that move to the next stage in the innovation pipeline? Some companies use design semantics for this purpose. This approach enables them to develop a shared definition of attributes and measure and rate the distinguishing attributes that would stimulate interest and motivate purchase.

Semantic differential, which is a quantitative tool, is the basis for design semantics. Semantic differential measures the strengths and weaknesses of a product or service by having respondents rate it between positive and negative descriptors. It is used to develop a precise, measurable profile of what creates predisposition to purchase.

Innovation pipeline measures and metrics

Establish measures and metrics for your innovation pipeline.

Semantic Design to Evaluate New Product Concepts

Below is a quick overview of how you can use semantic design with focus groups to help you evaluate product concepts. This approach allows you to determine which new product concept are worthy of moving to the next stage in the innovation pipeline.

We recommend organizing a focus group discussion into three sections: attribute identification and selection, concept matching and selection, and concept evaluation.

  1. Attribute identification and selection. This step helps determine the prospective buyer’s design criteria. It is important to complete this step before introducing any design concepts. During this step, coach participants to describe (using adjectives) their design criteria, such as practical, trendy, artistic, aesthetic, durable, safe, etc. Ask them how and why these adjectives really “fit” their needs. Be sure to also ask them to offer adjectives for the exact opposite. This step enables you to use the focus group conversation to delve into adjectives that will help address shape, color, size, etc. Once you have the list of all the attributes, have the group select the most important attributes, gain agreement as to the definitions and have them pair the attributes. (These groupings allow you to create pairings which you can use to profile and measure design preferences that can be used in a quantitative semantic differential study.)
  2. Concept matching and selection: The purpose of this phase of the conversation is to hone in the concepts that meet the most important design criteria.   After the attributes are defined and paired, show the examples of design concepts and ask the participants to match the designs to the attributes. During this phase of the conversation, establish that there wouldn’t be a price difference based on the attributes. After this phase of the research you can create variations of the concept and explore how respondents compare each concept based on the criteria and price, which models they like and dislike, and their impressions of their favorites.
  3. Concept evaluation: This phase of the discussion enables you to compare the best concepts to the competitive set. Using unmarked competitor models, have the group evaluate the competitive models against the same attribute pairings. Then using all of the concepts (your new ideas and the competitors’ products) discuss which of the concepts are now their preferred choice and why. This way you can compare your concepts and the competitors.

After you complete the process, you will be able to provide the composite profiles of each model, along with the qualitative comments, in order to determine which if any of the concepts best captures interest and motivates Sales. As with all qualitative studies, while the measurements are precise, the findings are directional in nature.

 

Comments are closed.

Follow me on Twitter

Best-in-Class marketers excel at accountability and metrics selection.

Download this Free guide to learn how they do it.

 

Assess, Classify, and Audit Your Marketing Metrics

  • This field is for validation purposes and should be left unchanged.

%d bloggers like this: