Product design and development: Research to boost success
Reduce your risk and enhance your new product or service's chance of success by gathering customer and competitive data.
If you have an idea for a new product or service, you may be tempted to start development right away. But before investing money or effort, research potential customers and analyze data about your competition.
"Research is really a process to help reduce the risk of failure," says Jeff Lash, service director, product management at SiriusDecisions, a research and advisory firm. "If you look at all the time, effort, and cost that goes into creating a product or service — and if you can save yourself some time and effort upfront — it will pay huge dividends in the long run."
Research your customer
One of the top sources of customer research can be direct conversations with existing customers and prospects. This can be done informally — and inexpensively — over the phone by simply asking about the types of products, features, or services they would like.
You can also survey customers and prospects online by creating polls on your company's website or by using an online survey tool. Many tools are available — including Survey Monkey, Google Forms, and Typeform.
You could even use focus groups in which customers and prospects are asked about their perceptions of a product or service.
No matter what method you use, consider asking these questions:
1. What are the top features/benefits you want in a new product or service?
2. How could existing products or services be improved?
3. What are the top problems you're trying to solve with this product or service?
4. How much are you willing to pay for the new or improved product?
Study competitive data
In addition to customer research, assess your competition. If you're on a budget, the public library is a good resource. "Public libraries often purchase access to subscription-based databases that business owners and entrepreneurs can use for free, rather than paying for these out of their own pocket," Lash says.
These subscription-based services, like Hoover's and Dun & Bradstreet provide detailed reports on companies, including their history, products, customers, and financial information. The U.S. Securities and Exchange Commission's Edgar online database on public companies is free to access.
Here's what to look for when doing competitive research:
1. What products/services do your competitors offer?
2. How are they priced?
3. What are the key benefits?
4. What is their value proposition (what differentiates them)?
5. Where might they fall short (for example, bad reviews)?
Researching your customers' and prospects' preferences, and studying competitive data, can reduce the risks when rolling out a new product or service. Gain even more market insight with the Competitive Intelligence Tool.