Why it this important?

Ideas are currency. Nothing has more potential to transform your business than a new product or service idea that 'kicks butt'. Customers not only have to have it, they’re prepared to pay more. Competitors can’t believe they didn’t spot the opportunity first.

Many consider innovation is easy, and knowing a good idea when you see or hear one is even easier.

So how do you develop and predict the success of a new product or service idea? How do you filter, refine and polish ideas so they light up customers’ imaginations and open their wallets?

What to do

Making the time to think about and identify new opportunities, fear of the unknown, cost and the risk of failure are the main obstacles holding businesses back from creating new ideas.

Choice, convenience and hypercompetitive pricing challenge existing customer loyalty. You can create sustainable business growth from developing relevant solutions that meaningfully address existing and potential customer needs or problems.

Investing the time to spot new business opportunities works best when it becomes a process rather than an event. Idea creation and validation doesn’t need to be time consuming or cost prohibitive and depending on your business, can give you the chance to involve and build on your existing customer relationships.

There is no one-size-fits-all solution. Your business, company size, the industry you compete in, what you sell, and who and where your customers are located will influence who you involve, how you tackle coming up with new ideas and the research methodology that’s best for you.

A simple four-step process can get you started.

1.  Discover

Take the time to think about, discover and recognise opportunities. This could be a new product, service, offer or the potential for a new customer experience.

What about a revamp or extension of your existing products or services?  Involve as wide an audience as possible: customers, ex and prospective customers, suppliers, and employees. If you have a large team, be sure to involve new employees. Often breakthrough ideas come from an outsider’s fresh and objective point of view.

Do you understand why existing customers buy from you?

One of the hardest things to do is see your product or service from the perspective of your customers.

Spend time with your customers, observe and put yourself in their shoes.

What do you see? What do you hear? What words do customers use to describe your business and offerings?

Do they say one thing, but do another? Do they use your product or service as you intended? By seeing things differently, you have a better chance of coming up with ideas that can help make a difference. What frustrates your customers? What problems are keeping them awake at night? What would make their life easier?

Do you make buying easy?

Depending on your business, is it easy for customers to buy your products or services? Does technology open new opportunities? Are there opportunities for new distribution channels, or to collaborate with a new partner to leverage a relevant customer insight?

Do you understand your customers’ needs, wants and desires that are relevant to your business?

Again, spend time with your customers, observe and put yourself in their shoes. What do you see? By seeing things differently, you have a better chance of coming up with ideas that can help make a difference.

What frustrates your customers? What problems are they experiencing? What would make their life easier?

Are different customer segments motivated by different needs? Are some segments more profitable than others? Do your current products or services address their differing needs and maximise the potential profitability of each segment?

Do your products or services need to be flexible or scalable to cater to different customer needs?

Markets and trends are constantly changing. How can you adapt while staying true to your values?

What can you learn from ex or prospective customers?

Feedback from ex-customers can give you a vital learning experience. These customers may not be prepared to give you their time or feedback, but if you can find a way to show you’re open to constructive criticism, accept it readily and take their comments onboard. While you can’t be all things to all people, focus on the top concerns and ideas to address them.

Encourage prospective customers to talk about their needs and problems. By getting their perspective you can think about whether your current products or services are relevant. What’s stopping them from choosing you? How could you tailor a meaningful offer to address prospective customer needs that your competitors have not acted on?

The opinions of ex and prospective customers can help lead to improvements and new product breakthroughs.

2.  Create

It’s now time to take what you’ve learned and translate this knowledge into new or improved product or service ideas and be open to discovering opportunities.  To build on what you’ve learned from customers, suppliers, etc. make sure you take the time to look at market trends, and what you can learn from other industries here and overseas.

The ideas stage is the time to be open-minded, challenge your thinking and take risks.

What ideas could help solve your customers’ problems?

What new product or service ideas could help solve your customers’ problems? How do these potential solutions relate to your existing offering(s)?

What do customers value most?

If your product or service is no different to that of your competitors, your only competitive edge left is price. How can you customise your product or service(s) so they relevantly address what your customers’ recognise as value and perceived worth?

Could you improve or update an existing product or service to make it more relevant and meaningful?

In the same way auto or software manufacturers update their product line-up, do you have an existing product or service that could be updated and upgraded so customers see an improved benefit?

Are there opportunities for spin-off business ideas, new revenue streams or new business collaboration? What ideas can you learn from other categories or businesses? For example:

• A restaurant offering cooking classes.
• An accounting practice offering lessons on business cash flow.
• Buy a Mac from the Apple store and for an extra $129 you get a year's 'One to One' membership giving you access to live support and training. What additional support or service could you offer customers to encourage loyalty and extend your relationship?

3.  Explore and research

Exploration and research is about sharing and testing customer responses to your new ideas. There are many ways to conduct research. The most common involve focus groups, face-to-face interviews, telephone interviews, and written or online surveys.

Depending on the size of your business, your first concern may be cost. This may influence you to consider researching the ideas yourself or getting a member of your team to do so. An important thing for you to keep in mind is that it is difficult to capture the innocence of seeing a new idea for the first time the way a customer does.

The value of research can depend on who does it. It is worth considering getting an experienced researcher to recommend a methodology to fit your objectives and budget.

It’s also important to realise most people can’t tell you how they will react to a new idea in the future. As a rule, people tend to be cautious of new ideas and sometimes this doesn’t reflect market behaviour.

Testing new ideas is a valuable development and learning process. This is your chance to explore the boundaries so don’t limit yourself to testing one idea, or test ideas that are too similar. Two to three ideas will give you the chance to explore and learn what connects with and motivates customers.

The general themes you should look to explore include:

Engagement and persuasion

Potentially great ideas connect with, and engage people. They’re simple and easy to understand. They encourage people to want to know more. Most importantly, great product or service ideas are persuasive - they encourage people to want to buy.

What do your ideas communicate to customers? What do they tell customers about your product or service and your brand?

Who do they think the new product or service will appeal to? Why?

Are the new product or service ideas relevant to your target customers and to your business?

Do the ideas feel new and differentiate you from your competitors? Do they make prospective customers more likely to buy your product or service? Do they change the way customers think about your business?

Value

Explore different price points to identify what customers are prepared to pay? Why? What benefit would they be prepared to pay a premium for? What benefit would they sacrifice to pay a lower price point? Value for money is about perceived worth and not always about the lowest price.

Identify which new ideas are most likely to be effective and profitable?

Do you have the time, resources and skills to make the ideas a reality? If the ideas resonate with customers, can you afford not to?

Sales

Could you maximise profitability through a different sales pitch? Eg ‘Three for the price of two’? Take the chance to assess the impact of different offers.

Payment

Do customers respond positively to flexible payment options? Eg Terms, credit card, sending an invoice later? Could flexibility encourage them to buy?

Communication

How do they want to be communicated with? What role does, or could technology play?

4.  Profit

Undertaking research is an investment. Validating ideas lets you:

• assess the likely customer relevance, impact and purchase intent of new products or services
• watch for 'hot buttons' and 'Achilles heels'
• understand what could be done to improve the product or service ideas to maximise the potential for profit and success.

Where to go for help

Do It Yourself

Conduct your own research

If conducting research with existing customers, consider they may be more open and responsive to someone who is not part of your business.

Create your own online survey

If you’re looking to conduct a simple and quick analysis of a new product or service idea, online survey tools are available at low cost. Search online or visit surveymonkey.com

Professional advice on accessing R&D grants, export grants  and the R&D tax Concession/Credit system.   

Ph: 02 9797 1777  Email: aiserv@bigpond.net.au Website: www.australianindustryservices.com.au

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